© Nathan Mandell Prof. Victoria Medvec

By Rebecca Lindell

It’s a two-part story, told in numbers. Part 1: 30 percent. That’s the percentage of Kellogg School graduates since 1975 that are women, a figure comparable to the alumni base of other top business schools.

Part 2: 1.2 percent. That’s the percentage of Fortune 500 companies led by female CEOs. Other numbers, like 5.2 percent — the proportion of top-earning executives that are women, and 12 percent — the percentage of corporate directors that are female — further illustrate the tale.

Why aren’t more women making it to the top ranks of American business? Hypotheses abound, yet huge gaps in the story remain. But Victoria Husted Medvec and the other co-founders of the new Kellogg Center for Executive Women are determined to fill in the blanks — and write a more satisfying ending.

Medvec already knows one thing for sure. The scarcity of women at the top is not due to a shortage of talent.

“This is not a pipeline issue,” insists Medvec, the center’s executive director and the Adeline Barry Davee Associate Professor of Management and Organizations.

“There are lots of women at the middle levels at many companies, but there’s a real dearth of them at the top. We need to surface these women with the experience and talent to be board members and top executives, and make companies aware of them.”

A multifaceted approach
The center was founded in June 2001 by Medvec, path-breaking Chicago businesswoman Sheli Z. Rosenberg and Kellogg School Professors Walter Scott and Lloyd Shefsky to do precisely that. Backed by a steering committee that reads like a “Who’s Who” of women in business, the center brings the full resources of Kellogg to bear on the barriers confronting executive women.

Prof. Walter Scott
Sheli Rosenberg
Prof. Lloyd Shefsky All Photos ©2003 Nathan Mandell

Those resources include the strength of the Kellogg research faculty, which will investigate the issues faced by female executives from a variety of angles. It also leverages the school’s prowess in executive education to train women for roles as effective corporate leaders — and to teach companies how to increase the number of women in their top ranks.

Such programs are already under way. Twice in the past year, the center has hosted the Women’s Director Development program, a three-day “boot camp” to prepare women for governance leadership roles.

Meanwhile, Medvec is mustering forces for what promises to be a seminal study on the roadblocks to women’s success. She and her colleagues will examine a broad cross-section of Fortune 1000 companies to determine what corporate practices are most effective for promoting women into the senior ranks. These “best practices” will then form the focus of executive education seminars aimed at companies seeking to include more women at the highest corporate levels.

The center’s founders are well aware that this knowledge will remain academic unless more women attain positions of true executive power. Accordingly, the center has set a quantifiable benchmark for its own success: a significant increase in the number of women on boards and in executive positions at Fortune 1000 companies.

“When women are able to achieve top positions in leadership and on boards, the whole corporation benefits,” Medvec says.

“They benefit from having better leaders, because they have broadened the talent pool. They benefit from having different perspectives in the boardroom. Many companies have markets consisting almost entirely of women, and often there’s just one woman — or no women — on their boards. Including more women will help them serve their customers more effectively.”

Extra challenges
Though the percentages of women in the top ranks remain startlingly low, even those numbers show progress. The number of female CEOs at Fortune 500 companies has increased threefold recently, from two in 1995 to six in 2002. And while women account for only 5.2 percent of the nation’s top-earning executives these days, there were far fewer just seven years ago. As recently as 1995, women held just 1.2 percent of all top corporate jobs, according to Catalyst, a New York-based advocacy group for women in business.

Catalyst’s own research points to a number of issues faced by women as they navigate their careers. According to the organization, the most common roadblocks include:

• Stereotyping. Male executives often assume a woman wouldn’t want a particular job, such as one that includes a great deal of travel.
• Exclusion from informal networks. Women are less likely to hear about the job opportunities or office gossip shared by male executives.
• Lack of mentors. There are few women in top jobs to support and promote younger women as they rise through the ranks.

Kellogg School alum Betsy Holden understands the challenges — and benefits — of cultivating gender and other forms of diversity in the corporate world. As co-CEO of Kraft Foods Inc., Holden ’78 notes that Kraft has shifted from “seeing diversity as a responsibility and the right thing to do, to recognizing it as an important source of competitive advantage.”

Holden cites several key points that helped bring about this change at Kraft. Among them: making the case by showing how a diverse workforce leads to new ideas, more innovative solutions and better business performance. In addition, Holden says it’s vital to align the organization through training, setting goals and tracking progress to ensure that the most qualified candidates are identified and developed. Peer support as women advance into senior positions, as well as “visible, vocal and constant support from senior management to model the behaviors” is essential, Holden says.

Center for Executive Women president and Kellogg Adjunct Professor Rosenberg also has seen the hurdles women face.

Rosenberg is the vice chairman and former CEO of Equity Group Investments Inc., a Chicago-based, privately held investment company with interests in companies having more than $10 billion in annual revenues.

Though she has served on many corporate boards, Rosenberg has often found herself to be one of the few women — if not the only woman — in these boardrooms.

It isn’t so much about discrimination, says Rosenberg, who acknowledges that boards function best when members feel comfortable with each other. “A board, to work, has to be collegial,” she says. “You all have to have respect and confidence in each other. But that doesn’t mean we all have to be white, between the ages of 55 and 60, and male.”

Cracking the glass ceiling
Women face a number of challenges in gaining entrée into this historically “all-boys network,” Rosenberg says. Not only must they demonstrate the skills to be effective board members, they must also fit into a traditionally male social system — with few female role models to help them negotiate the learning curve.

“But once you’ve proven yourself, it opens the door to other opportunities,” Rosenberg notes. “Once you’ve conducted yourself in a way that makes the other board members comfortable, you are deemed ‘safe’ for other boards.”

Rosenberg has long been a forceful advocate for women in business. In addition to her corporate duties, she is a director for the Chicago Network, National Partnership for Women & Families, and the Women’s Issues Network Foundation. Crain’s Chicago Business has identified her as one of the “100 Most Influential People in Chicago.”

Rosenberg recently stepped down as Equity’s CEO, with the goal of spending more time on issues important to her. At the top of her list was increasing the number of women serving in leadership positions and on corporate boards.

Rosenberg discussed her ideas with Scott, whom she had known since the two served together on the board of Illinova Corp. in the 1990s. The pair found allies in Medvec and Shefsky, who already had approached former Kellogg School Dean Donald P. Jacobs with the idea of establishing a research center for women in business. Jacobs agreed, and the Center for Executive Women was born, with Rosenberg providing the initial funding.

Shefsky had identified the need for the center early on, after spending years as an attorney representing many female businesswomen and entrepreneurs. The director of the Kellogg Center for Family Enterprise believed that a Kellogg center for women in business would put the school at the forefront of an irreversible trend. It was also, he says, “the right thing to do.”

“I know firsthand the extraordinary and often unique value that businesswomen bring to the table,” says Shefsky, a clinical professor of entrepreneurship and family enterprise.

“It has been disappointing to see corporate America fail to convert that great opportunity. It is an unrealized asset that could prove a meaningful advantage in this globally competitive world.”

Scott’s thoughts were much the same. As CEO of IDS Financial Services in the early 1980s, he had observed the influx of women into the work force but noted that few, if any, reached positions of real influence.

“We weren’t doing much of a job of getting them to the top levels,” recalls Scott, a professor of management and a senior Austin Fellow. He perceived that opening the doors to the executive suite would be not only “morally right, but pragmatically right. It would be a way of doubling the number of candidates for a job.”

Scott sought to recruit talented women to IDS and launched leadership development programs for women already in the IDS ranks. He also tried to place women in the sort of operational jobs that at the time were held mainly by men.

The initiatives found support within the organization, but they may have been ahead of their time. “Undoubtedly, there were roadblocks we may not have recognized,” Scott says.

Some of those roadblocks may remain, but many have been swept away as women have moved into the upper ranks in increasing numbers.

“There are so many more women in significant positions than there were 10 or 20 years ago — in actual line positions, with profit and loss responsibility,” notes Margery Kraus, president and CEO of APCO Worldwide Inc. and a member of the center’s steering committee.

Kraus believes boards are now more willing to welcome women as members, particularly as firms cast their nets for candidates able to withstand heightened scrutiny after the recent series of high-profile corporate meltdowns.

“The problem was that initially, people were appointed to boards on the basis of being a CEO or in an executive position, so you had a much smaller pool of people to choose from if you were looking to pull people from that area,” Kraus says.

“You would see the same woman on five, six or seven different boards. And she would be the one woman on the board. The thinking would be, ‘We have our woman board member, our minority board member, and now we can go back to choosing people that look like us.’”

New laws requiring “truly independent” board members have created opportunities to expand the pool of candidates to include more women and other underrepresented groups, Kraus says.

For Scott, the center has arrived on the scene not a moment too soon.

“The time was right for this 30 years ago,” Scott says. “But now there’s a critical mass of women in middle management, and the Center for Executive Women can make a real difference in the opportunities for women at the top levels of management.”

For more information about the Center for Executive Women, please call Cathy Taylor at 847-467-7107.