Ten Percent Of Fortune 500 Companies Are Now Women-Led: The Changing Face Of Leadership

In early 2023, women leaders reached a new milestone. They now lead more than 10% of Fortune 500 companies, including one company in the top 10. While these numbers may not sound like a cause for celebration, they are when one considers the history of women achieving top leadership roles in business.

For decades, the Fortune 500 list included just one to two women CEOs, and only due to the long tenure of Katherine Graham of the Washington Post. As recently as 2000, only four women-led Fortune 500 companies. In contrast, there are now 53 women leading Fortune 500 companies. But will this new milestone open doors for more women leaders in the future?

Power In Position Versus Power In Numbers

People like to say that there is power in numbers, and there is some evidence that this holds true. A widely cited 2006 study published in the Harvard Business Review found that when there is one woman on a board, progress is difficult. But when three or more women are on a board, dynamics shift. "At that critical mass," the researchers observe, "women tend to be regarded by other board members not as ‘female directors’ but simply as directors, and they don’t report being isolated or ignored."

Still, many people who cite this 2006 study neglect to highlight that change isn’t driven by the numbers alone. Position (in this case, board membership) seems to matter as much or more than numbers. This explains why women still lag behind men in leadership roles, even in female-dominated sectors like healthcare and education. Although change can be driven from the bottom up, systemic change rarely happens unless it is championed by leaders at the very top.

Without question, the 53 women now leading Fortune 500 companies are in a prime position to transform their companies. They are also positioned to champion change for the next generation of women leaders. But will they leverage their positions?

Opting In To Transformational Leadership

Transformational leadership is a choice. Whatever one's gender, race or ethnicity, leaders still have to choose to build a more diverse, inclusive and equitable organization. Fortunately, there are indications that the women currently leading Fortune 500 companies seem to be up for the challenge.

In December 2022, Reuters reported that Citigroup, led by Jane Fraser, promoted more than 100 women to the role of managing director. This is the highest number of women the bank has ever promoted to MD roles. Earlier in 2022, Accenture, now led by Julie Sweet, ranked first on Refinitiv's Global Diversity and Inclusion Index, based on a survey of 11,000 companies around the world.

But Accenture may not hold the title forever. When Mary Barra took the helm of GM in 2020, she announced plans to transform GM into “the most inclusive company in the world." According to Refinitiv, however, Barra has not yet achieved this goal (GM doesn't even rank in the top 100 companies on their index). So, how does one build a truly inclusive company? As a coach and consultant, my advice is simple. It's not enough to talk about diversity, equity and inclusion. You also have to walk the talk. Here are four ways to do so.

1. Prepare For A System Overhaul

In most cases, biases don’t just live in individuals, but in systems. In organizations, these systems include an entire array of policies, structures and practices. As a result, building organizations that work for women and other underrepresented groups requires a systemic transformation, including an overhaul of all human resource systems, especially those related to recruitment, onboarding and performance evaluation.

2. Track Change

Most of us have heard the adage, “What gets measured gets managed.” This adage also seems to hold true when it comes to moving the dial on equality in the workplace. Measuring and tracking progress is a powerful way to motivate employees to recognize and embrace an organization’s diversity, equity and inclusion (DEI) agenda.

3. Incentivize Progress

Like it or not, rewarding individuals and teams for making measurable progress on DEI priorities matters. It communicates the importance of this strategic priority and can add a sense of urgency to the agenda.

4. Support Employees In And Beyond The Workplace

Finally, organizations committed to advancing women leaders need to take a deep look at their employees’ needs in and beyond the workplace. For example, decades of research have confirmed that women are frequently knocked off course mid-career due to the demands of raising a family. We also know that introducing affordable or free onsite childcare (and subsidizing offsite childcare) reduces attrition rates.

Final Thoughts

With over 10% of Fortune 500 companies now led by women, the groundwork is being laid for more women to enter the C-suite in the near future. If today’s exceptional leaders want to secure this future, now is the time for them to opt in to transformational leadership—both in theory and in practice.