When General Motors (GM) appointed its first female chief executive this week, just days after Twitter (TWTR) added the first woman to its board of directors, the moves triggered a wave of commentary about ongoing gender imbalance in pay and power in the still male-dominated U.S. workplace.
Let’s state the obvious: Women still have a long way to go when it comes to pay and representation in the senior ranks of corporate America. Less appreciated, though, is the fact that the biggest corporations are the most progressive force for change inside the nation’s boardrooms. The data show pretty resoundingly that female executives are most likely to serve as directors at larger companies than at smaller ones.
And it’s not just by total numbers. Smaller companies naturally have fewer employees, so fewer women in total will be represented. But the percentage of representation by women remains lower—and it gets even smaller as the companies in question get smaller.
All the analysis below is based on publicly traded companies in the U.S., with at least $50 million in annual sales, market cap or more than $50 million, and more than 50 employees. That gives us 2,060 companies to work with. Split into deciles by market cap, each of the 10 groups contains 206 companies. The largest companies, in Group 1, average 35,000 and a market cap of $37 billion; the smallest companies, in Group 10, average 400 employees and $107 million in market cap.
Here’s the most interesting chart, showing that the percentage of women represented on boards is related to the size of the company: Bigger companies have more women, as a percentage of their boards.
You might think that’s because there are simply more spots to fill at big companies, but that’s not the reason. For context, here are the total number of board seats for each set of 206 companies:
And below are the total number of women on those boards:
So when you look at the percentage of women represented, they fare better at the biggest companies and do gradually worse at smaller companies.
If you look at the median number of female board members at these companies, the median number at most size levels is one—a single woman on the board—while at the biggest companies the median number is two. At the smallest companies, however, that number is zero. Look at the bar that doesn’t exist for Group 10:
This effect is not true when you look only at chief executives. There’s doesn’t appear to be a link between female CEOs and the size of the company, as you see here:
What are the reasons for this dynamic in board seats? Some experts believe that larger companies face more scrutiny around good-governance practices. Courteney Keatinge, of shareholder proxy firm Glass-Lewis, argues that “larger companies face more investor pressure and reputation risk” and that “people pay more attention to bigger companies.” Keatinge, author of an annual “Board Gender Diversity” report, notes that smaller companies might have fewer governance standards and may not use recruiters to find board members in the same way that larger companies might.
Her research shows that consumer-staples companies tend to do a better job of hiring more women on their boards, as it may relate to better positioning for their customer base, who tend to be women. Interestingly enough, even in that industry, size still matters: