Why Exactly Are There Fewer Women Managing Directors?

DESPITE its progressive reputation, a recent study in Finland looked at the reasons behind the gender gap in corporate leadership.

The question of why there are fewer female CEOs than men was at the forefront of a revealing study from the Aalto University School of Business, Finland, according to Response Source.

Conducted by Matti Keloharju and Samuli Knupfer, esteemed professors at Aalto University in Finland, the research highlights a critical factor affecting women’s ascent to CEO positions. The study, focusing on Finnish professionals, was published recently.

Career Interruptions

The investigation points to career breaks, often related to parenting, as a primary barrier. These interruptions are most impactful during pivotal career-building years. ‘These gaps in women’s labour market attachment usually arise after the birth of a first child, causing their absences to increase relative to men,’ notes Prof. Keloharju. In Finland, a country known for its egalitarian values and family-friendly policies, this finding is particularly striking.

It was revealed that these career gaps account for 26 per cent of the gender disparity in CEO roles. This percentage escalates to 41 per cent among university-educated parents. Although the factors that influence these interruptions diminish as children grow up, they do not go away completely, remaining evident a decade after the birth of a first child.

Sectoral Differences And Work Experience

The research also sheds light on the types of roles women and men occupy in their climb to the top. Women executives are more commonly found in personnel and public relations, while CEOs often emerge from sales or production, areas which generally have more male representation.

Prior executive experience in these sectors contributes 22 per cent to the overall gender gap, with an increased impact of 26 per cent among parent graduates.

Swedish Data

The study’s insights are based on an analysis of 143,000 Swedish business, economics, and engineering graduates. This comprehensive review spanned 25 years, utilising data mostly from Swedish government registries. The choice of Swedish data offers a parallel to Finland, given both countries’ similar societal structures.

Gender Discrimination

In an effort to gauge the role of discrimination, the researchers consulted Sweden’s Work Environment Survey. With only 9 per cent of female respondents reporting gender-related discrimination at work. Surprisingly it appears to play a minor role in the CEO gender gap in Finland and its neighbouring countries.

This Finnish-led study not only highlights the challenges women face in reaching the highest corporate ranks but also calls into question the effectiveness of policies in even the most progressive societies.