Women now make up nearly half of our workforce and are a substantial majority of college graduates. Households are now more likely to involve a more even split of home and work responsibilities than ever before.
Yet the U.S. labor market has not fully adapted to these changes, with too few businesses recognizing that many of their workers — men and women — need to be able to balance home and professional responsibilities. Every day, businesses are realizing that change is essential to their bottom line.
On Wednesday, the Council on Women and Girls and the Council of Economic Advisers hosted a convening at the White House focused on opportunities for business schools and the business community to work together to ensure that students are trained to lead in the 21st century and to expand opportunities for women in business.
To highlight the need for change, the Council of Economic Advisers released an issue brief documenting the barriers that many women face in business careers.
Research shows that greater diversity in the workforce increases productivity, improves decision making, and heightens performance. But in 2014, only 5 percent of CEOs at Fortune 500 companies were women, and in 2013, only 17 percent of board seats at these companies were held by women.
Studies show that, from a young age, girls internalize messages that they don’t have the skills to succeed in business or that business isn’t for them. By the time they reach college, women are about 30 percent less likely than male undergraduates to major in business. These gaps continue to grow as men and women move into graduate education. Enrollment in MBA programs is sharply skewed towards men: Only 38 percent of students in full-time MBA programs are female.
Women have fewer role models in the classroom, both in terms of faculty and in business cases. A review of case studies found that women were absent in close to half of cases and were the protagonist in just 13 percent of cases. Among general business faculty, only 14 percent of full professors are women, while 42 percent of instructors are female.
Once women have graduated from business school, they continue to face obstacles in the workplace. A study of salaries of MBA graduates from a top business school found that though men and women had fairly similar earnings at graduation, after only 5 years, men earned approximately 30 percent more than women, and, after 10 or more years, this gap stretched to 60 percent. This is in large part due to differences in the likelihood and length of career interruptions, including for parental leave.
Businesses and business schools working together on this issue is vital for ensuring the success not only of women in business, but of the American workforce and the American economy as a whole. As part of Wednesday’s event, more than 45 business schools announced that they were committing to a set of best practices offering concrete strategies for business schools to help women succeed throughout school and their careers, and to build a business school experience that prepares students for the workforce of tomorrow.
And since the event, even more schools have expressed interest in signing on. These best practices, which grew out of discussions among business school deans, focus on four key areas:
Following Wednesday’s event, the best practices will be housed on the website of AACSB International (the Association to Advance Collegiate Schools of Business). As the global membership association for more than 1,450 business schools, and the accrediting body for more than 700 institutions worldwide, AACSB has committed to supporting business schools in their efforts to expand opportunity for women in business careers. To help lead these efforts, AACSB announced on Monday, August 3 the appointment of its first Chief Diversity and Inclusion Advocate, Christine Clements, who will lead this effort.
Wednesday’s convening, along with the commitments by business schools and the AACSB, is a concrete step forward in starting a larger conversation about helping women succeed throughout the business community and the broader workforce. We are looking forward to the work ahead.
Betsey Stevenson is a member of the Council of Economic Advisers. Valerie Jarrett is Senior Advisor and Assistant to the President for Intergovernmental Affairs and Public Engagement.