With the debate over corporate diversity programs reaching a fever pitch, a pair of research notes released last week shows that whatever progress that has been made over the past several years was limited.
In a report
released last week, Morgan Stanley’s Calvert Research and Management said that while significant progress has been made in female representation at the board level and within lower staff ranks, executive and senior management levels remained elusive.
In fact, according to Morgan Stanley, the gender gap among senior managers has barely closed, and, in some cases, has widened. The report states that both executive and senior management roles “hovered” at or below 30% between 2019 and 2024 without showing signs of any real change. During the same period, gender diversity in staff and board roles increased.
Over the past several years a regulatory and governance push to diversify corporate boards, such as California Assembly Bill 979, were created in the hope efforts would spread through organizations' management ranks. But those efforts have come up short in practice, while regulatory and legislative efforts, like the California legislation,
were later found unconstitutional.
“As members usually play an active role in hiring decisions and influencing the culture of their companies, the widespread expectation has been that a greater number of female board directors would lead to an increase in the number of female executives and managers,” the Calvert report says. “This implicit assumption is commonly referred to as the trickle-down effect. Yet, as illustrated in the above sections, the trickle-down effect has not noticeably closed the gender or ethnic diversity gap, and the pipeline issue still hampers the career advancement of marginalized groups.”
An explanation offered by the Morgan Stanley researchers is that new laws, regulations and governance measures focused on diversifying the beginning (staff) and end (board) of the talent pipeline through regulatory imposed “quotas” has resulted in management roles being ignored.
“The high representation of women on boards is likely due to national quotas adopted globally,” Calvert researchers said. “Despite improved board-level diversity, we have not seen a corresponding increase in diversity in senior management. Clearly, the trickle-down effect has not yet fully materialized.”
The limits of diversity efforts is not limited to the United States, with MSCI saying
in its recent report that “global boards in general were more diverse than executive suites, both in terms of gender and ethnicity.”
Despite the overall progress in female representation at the board level, leadership roles, including the chair position, remained male-dominated,” MSCI said.