Is the C-suite stagnating, or is it transforming?

The answer may be a matter of how you read a report released last week by Heidrick & Struggles. The Route to the Top 2022 study demonstrates that a lot of top companies still lack women in top leadership roles. Only 12 women headed Fortune 100 companies as of July 15, according to the study—the same number as last year.

The numbers relating to ethnic and racial diversity are similarly stagnant, which is reason to wonder if all the talk that organizations made around DEI in the past few years was more than that. 

In a statement, Heidrick & Struggles’ Partner Lyndon Taylor acknowledged the concern: “While the advancements women and other diverse executives have made toward the CEO role are gaining momentum, we still aren’t seeing that momentum pivot to notable increases in CEO appointments for these underrepresented groups.”

The problem echoes the findings of a LeanIn.org report last month, which found that organizations—especially at middle-management levels—haven’t been paying attention to bias and other issues that can narrow the leadership pipeline for women leaders. And that’s likely to result in a loss of talent at organizations.

When hiring, boards are less prone to mitigate perceived risks by requiring additional qualifications from women.

Still, there are some factors bubbling under those top numbers that suggest a potential for change. For one, the numbers are much better for boards, where turnover is more routine. There, Heidrick & Struggles found that Fortune 500 firms posted record numbers of first-time board members and women appointees. 

And there’s evidence of that increased openness in the CEO hiring process. An increased percentage of CEO hires were internal, which as the report says, demonstrates “a heavier reliance on internal succession planning process and a focus on developing talent.” The percentage of new CEO appointments for first-time CEOs skyrocketed, from 48 percent to 69 percent, suggesting an increased interest in finding the right fit for a job, not just prior CEO experience.

The study also found that the work backgrounds of new CEOs were similar among women and men, which suggests more equitable hiring processes. The report says that “women are now more often being evaluated on the same terms as men,” and that “boards are less prone to mitigate perceived risks by requiring additional qualifications from women.”

That’s only moderately satisfying news, when women still occupy only a quarter of C-suite positions in the United States, according to the LeanIn.org study. But there’s reason to believe organizations aren’t giving up on the process—it’s just sound business to not lose your best leadership talent. Moreover, organizations may be recognizing that the internal pipeline is important, and that getting talent on it early matters. The report recommends that when they’re hiring, boards should “dive at least to the pool of executives two levels below the C-suite” to look for talent. Diversifying leadership starts well before people become leaders.

What does your leadership pipeline process look like, and how have your diversity initiatives affected it? Share your experiences in the comments.

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