High fluctuation of women in management positions

Seven or two years before the end of the transition periods, the executive boards of the 100 largest Swiss employers have 20 % women and the boards of directors 31 %. This means that they have reached the gender benchmarks of 20 percent on executive boards and 30 percent on boards of directors required by politicians. "Nevertheless, this year's results leave a bitter aftertaste. It was already clear two years ago that the companies would achieve the benchmarks. However, chalking this up as a success would be short-sighted," says Guido Schilling, publisher of the schillingreport, which regularly examines the gender diversity of management bodies in the Swiss economy and public sector. The 2024 edition also explored the question of what changed patterns can now be observed, now that the basic homework seems to have been done. To say it up front: There are indicators that may show positive results in the short term, but would harbor risks in the long term.

High fluctuation of female members of the Executive Board

While the proportion of companies with at least 30 % women in management has risen continuously over the past 5 years from 4 % in 2019 to 21 % in 2023, it is currently falling again to 20 %. At the same time, the proportion of companies without women on the Executive Board has stagnated at 23 % after years of steep decline from 53 % in 2019 to 25 % in 2023. One reason for these shifts can be seen in staff turnover: while between 10 and 16 women resigned from their position on the Executive Board in previous years, the current figure is 33. These are offset by 44 new female members joining the Executive Board, resulting in a net increase of 11, which means that the gender benchmark of 20 % has just been reached. "Retaining the women we have gained is the key to achieving a balanced mix," says Schilling. "However, we have noticed for years that female members of the Executive Board have been on the board for significantly less time (3 years) than their male colleagues (7 years) when they leave office. Such a short period of membership can hardly be sustainable." 

Why the high fluctuation? Attempts to explain

The high fluctuation of women in management positions is the subject of further research. A look at the new members of the Executive Board shows that 62 % were already working in the company before they joined the Executive Board. This proportion of internal appointees has remained roughly the same over the past few years. Of the male members of the Executive Board, 64 % were appointed internally, compared to 55 % of the female members. Conversely, this means that 45 % of the female members of the Executive Board joined the company and the Executive Board from outside. "This could well be a reason for the shorter length of stay of the female Executive Board members who left," Schilling points out. "Someone from outside the company who may be taking on a management role for the first time not only has to familiarize themselves with their new role on the management board, but also with the company, the culture and the circumstances. Internal appointees have the advantage that they know the company-specific DNA and are already networked."

The women who were promoted internally were appointed to management after just 9 years with the company, compared to 12 years for men. This means that too early a promotion with a correspondingly smaller backpack of experience can lead to women leaving top positions again after a short time. According to Guido Schilling, one solution could be to promote more women to middle management and retain them for longer so that they can be promoted more successfully later on. Another reason for the high fluctuation: women often hold service functions such as HR or marketing in top management. In the event of restructuring, these functions often move back into middle management, which causes a disappointed female job holder to leave the company.

High proportion of foreign women

The proportion of foreigners on the Executive Board has oscillated around 45 % for many years and currently stands at 46 %. Broken down by gender, 45 % of the male and 57 % of the female members of the Executive Board are not from Switzerland. Among the newly appointed members of the Executive Board, there are 55 % without a Swiss passport, 51 % of men and 66 % of women. The companies in the SMI are significantly more international in composition, with 73 % foreign members of the Executive Board, 68 % of the men and 85 % of the women not holding a Swiss passport. "Foreign managers also have to familiarize themselves with the country and its people," says Schilling: "In contrast to other countries, there is still no tradition of balancing family and career in Switzerland." Another reason for the high turnover of female managers is that they feel misunderstood in Switzerland with their career ideas? Absolutely, says Guido Schilling. Those who are not familiar enough with the local culture find it difficult to gain a foothold.

Among the new members of the Executive Board, it is also noticeable that at 49 years of age, the women are considerably younger when they join the board than their male colleagues, who are appointed at 52 years of age. Conclusion: "The female members of the Executive Board are younger, are promoted earlier, tend not to have a Swiss passport and stay on the board for a significantly shorter period of time than their male colleagues," summarizes Schilling.

Increasing ageing of the management team

In recent years, the average age has risen continuously across all samples. The members of the Executive Board are currently 53 years old. At 51, the female members of the Executive Board are slightly younger than their male colleagues at 54. The age of the CEOs has risen the most. In 2011, the average age was 52, with the newly elected CEOs being 49 years old. Of these 14 newcomers, 29 % were older than 50 at the time. Currently, the CEOs are on average 55 years old and the newcomers 53 years old. 67 % of the 24 newly elected CEOs are currently older than 50. "In view of the demographic trend, this ageing poses major risks and will lead to a dead end in the long term," says Schilling. "I wonder whether the boards of directors are taking this into account in their risk assessments."

Motor SMI loses drive - Public Sector on track

The companies listed on the SMI already reached the gender benchmark of 30 % on the Board of Directors and 20 % on the Executive Board in 2022. This figure is currently stagnating at 34 % on the Board of Directors and rising slightly to 26 % on the Executive Board. "Both respectable figures, but there is a noticeable flattening in the SMI economic engine, which makes me sit up and take notice," says Schilling.

In the public sector, the proportion of women in top management rose to 25 % ( previous year 24 % ). 31 % of vacancies in top management were filled by women. Looking at the federal administration separately from the cantons, the proportion of women in top management continues to stagnate at 38 %, with women currently filling 25 % of vacancies at federal level.

Setting the course for the future now

"Until now, private and public employers have been in an absolute minority when it comes to recruiting women for management positions. The higher up the hierarchy, the more the search for women resembled the famous needle in a haystack," summarizes Guido Schilling. "We are currently seeing that there is a respectable pool of qualified female managers in middle management in the Swiss economy who are not only active in service roles, but increasingly in business roles with a direct impact on results. In a few years' time, this potential will be reflected in the management boards if companies focus on framework conditions that promote the compatibility of career and family and within which women feel comfortable." Could top sharing or Co-leadership provide a solution to this challenge? Guido Schilling says: "Any form of flexibilization of models serves the cause". For the time being, however, he considers job sharing of management functions to be more suitable for middle management.

Source and further information: www.guidoschilling.ch