July is a special month to me. It’s the month of my teenage daughter’s birth, the month of my wedding anniversary, and — one year ago — July was the month I began my tenure as Dean of the Wharton School. Despite being a challenging year in higher education, as I reflect back on my year at the helm of the first and arguably best business school in the country, I have so many reasons to be excited about what lies ahead.
One reason is last week’s announcement about Wharton’s most recent achievement — enrolling 52 percent women in our incoming MBA class. This accomplishment was long in the making. Following years of committed leadership, relationship building, and culture enhancement, our admissions team attracted a record number of female students while also eclipsing metrics in GMAT average — a testament to the diversity and talent of this year’s class.
Reaching this milestone brings me both personal and professional joy. For years, my academic scholarship has focused on women in leadership and, in particular, how the business world values female executives. Many years ago, I co-authored an academic paper titled SHE-E-Os: Gender Effects and Reactions to the Announcement of Top Executive Appointments. The goal was to determine how investors respond to the announcement of women to CEO and other C-level positions relative to the announcement of men. We studied the decade spanning 1990 to 2000, and in that timeframe, there were 529 CEO announcements — 17 of which were women. Using stock return data as our key metric, our results demonstrated that investors responded more negatively to the announcement of female CEO appointments than their male counterparts, and also more negatively to female CEO announcements than to the announcement of women to other executive leadership positions. Overall, we were not surprised with the findings, but we were disappointed. After defeating the odds to reach the C-suite, women were being judged on their impact even before they took the helm.
Fast forward to 2021, and I’m pleased to see some things have improved. The number of women CEOs of today’s Fortune 500 firms is 41, more than twice the number in a single year from our decade-spanning sample 30 years ago. Despite slow progress, the trajectory is at least promising.
That slow but steady progress exists in business education as well. In the 1980s, the number of women earning bachelor’s and master’s degrees in U.S. colleges began to outpace men, but gender parity in graduate business education has been harder to attain. The hypotheses for why are numerous, but our 2007 She-E-O study noted some things we should consider, including the dissonance related to the proportion of male vs. female CEOs. Our study showed that, when the representation of a group (e.g., women) falls below a certain proportional threshold, there are damaging implications for how those in the minority population are perceived. Conversely, as the proportions balance, the perceived differences between the groups become less salient, and characteristics like a person’s experience and competence weigh more heavily in how people assess someone’s talent. More directly put, the data show that it’s simply harder to have confidence in women executives when they have historically represented such a small fraction of all executives. And what’s most challenging is that this perception likely prevents more women from pursuing a career in business, creating a self-fulfilling prophecy.
So as Wharton celebrates breaking this important barrier, we must also consider how we remove the roadblocks women encounter on the road to success — not just in business, but in life. My research reminds me that this is indeed a daunting task, but my life experiences reassure me that it is also possible. As I close out my first year as Dean at Wharton, this is the feeling I will work to keep alive — that it is possible to achieve a longtime goal, and yet still strive for what lies beyond.
Erika James is Dean, Reliance Professor of Management and Private Enterprise, and Professor of Management at the Wharton School of the University of Pennsylvania. This post was originally published on LinkedIn, where she was named an “influencer” for her insights in the business world. View the original post here. Follow Erika on Twitter.