...higher education women, and dynamic industry and firm conditions could result in greater participation of women executives in firms moving toward major corporate status through initial public offering. However, our study results show few significant differences between women's participation in high-growth, high-potential firms versus the Fortune 500. Several of the findings directly contradict our hypotheses, with lower rates of women as board directors and a greater likelihood of the executive team being composed exclusively of men in high-growth, high-potential firms. Women are not present in the top leadership spots of Chief Executive Officer (CEO) and Board Chair in either sector, and within high-growth firms are significantly less likely to be found on the boards of venture capital backed companies. The implications of these findings for companies, for policy, and for women and men planning careers in business are discussed.

Introduction

Although some individual women have always held leadership roles in U.S. business, substantive discussion on equitable access to leadership positions for women as a class emerged as part of a wider societal debate on civil rights in the 1960s. As a result, some activism and infrastructure within government, corporate and nonprofit organizations arose to document and endorse the promotion of capable women to executive and board roles. The most recent data available shows that advances on this agenda have been slow: women represented just 16% of corporate executive officers among all Fortune 500 companies in 2006 compared to 9% in 1995 (Catalyst, 2006a). Although this represents an absolute increase from prior decades, women executives of Fortune 500 companies in 2005 still held less than 10% of clout titles (those higher than vice president), fewer than 1% of Chief Executive Office and Board Chair positions, and only 6% of the top earner positions (Catalyst, 2006a).

On Fortune 500 boards of directors the percentage of seats held by women was 15% in 2005, up from 12% in 1995; one in nine Fortune 500 companies had no women on its board (Catalyst, 2006b). Furthermore, women were significantly underrepresented as board chairs and chairs of the most powerful committees including audit and compensation (Catalyst, 2006b).

In comparison, women's gains in the business start-up sector of the U.S. economy have been strong. Over the past two decades, the U.S. Census Survey of Women-Owned Business Enterprises (SWOBE) has documented a dramatic growth in women-owned businesses both in number and economic power. From 1982 to 1999 the number of women-owned businesses grew by 250%, to 9 million women-owned businesses employing 28 million people and generating more than U.S.$3.6 trillion in sales (U.S. Census Bureau, 2001). Still, doubt exists on whether these gains have blossomed equitably across types of firms. Examining high-growth firms funded by venture capital, the Diana Project on women and venture capital shows that although a record-breaking U.S.$102 billion was invested in firms by the U.S. venture capital industry in 2000, women entrepreneurs received less than 5% of that total (Gatewood, Carter, Brush, Greene, & Hart, 2003). Other work has shown that women-led small- and medium-size enterprises hold their own in terms of firm performance, but only when adjustments are made for risk (Watson & Robinson, 2003).

Developmentally bridging the sectors of traditional corporate America represented by the Fortune 500 and the segment of start-up and small women-owned businesses tracked by SWOBE lies another group of firms critical to U.S. economic success: firms targeted by Wall Street as high potential for growth in value. These firms, characterized as high-growth and high-potential throughout this article, are making the critical governance transition from private to public status through the initial public offering (IPO) of stock on a public equity market. The U.S. IPO market jump-started into global significance in the 1970s by fueling high-potential, new, small and/or historically private firms into and through high-growth phases in traditional and innovative industry sectors. Indeed, more than 25% of the Fortune 500 in 2000 went public between 1980 and 1990 (Nelson, 2000).

While a limited but general expansion of women's leadership in business over the last 30 years in the United States can be documented, the role of women as founders and leaders in corporate governance in this particular segment of firms is not known, although it has been discussed anecdotally (Connolly, 2001; Lubman, 1994). This knowledge gap led to the development of our empirical research question: in dynamic, high-potential sectors of the U.S. business economy, how are women participating in governance?

This question informs a knowledge building agenda focused on understanding the conditions and benefits of entrepreneurial activity in the U.S. economy. Firms at IPO tell part of the story of founders and the growth of their ventures. Nelson (2003) established that 60% of all firms undergoing IPO in 1991 had firm founders as CEOs and many firms continue with founder CEOs or Board Chairs post-IPO. These findings are supported by Pollock and Fischer (2004). More broadly, firms at IPO are a bridge generation, in an evolutionary sense, between the start-up and the corporate behemoth. Knowing more about the initial public offering high-growth stage of potentially influential corporations informs our knowledge base about the start-up and mature, corporate stages of organizational life as well. Particularly in terms of women's leadership, this research gives us more information to answer the question: do the rates and roles of women's participation in governance change (expand/contract) as firms move along the road to become large corporations? Ultimately this question addresses the promise of entrepreneurship and its realization.

Moreover, at the individual level of analysis, this research speaks to women making decisions in terms of education and career building. As women contemplate where to apply their labor, they make choices about business start-up, high-growth, or corporate employment life. The research also serves companies, government, academia, and the interested nonprofit sector who wish to better evaluate women's relative participation in governance and the factors that may or may not influence those rates. Finally, business educators can use this information to advise their students, male and female, on issues in the workplace that may be influenced or driven by sex-based variances in upper management profiles.

We begin the article by presenting a categorization of factors that encompass the range of arguments used to explain lower participation rates of women in corporate business leadership roles in the United States. While we acknowledge that these factors are likely to be active in all economic sectors, we proceed with the objective to test an assumption that women are better represented in firms at initial public offering than in large, established businesses. A series of hypotheses on the roles, rates, and characteristics of women as founders, executive officers, and board members across economic sectors are presented. Within high-growth, high-potential firms we look specifically at two segments well examined in the entrepreneurship literature: firms funded by venture capitalists and those in industries noted for technological intensity. In the Discussion section, we explore our findings with the goal of continuing to build an understanding of women's participation as entrepreneurs and governance leaders in the United States.

Explaining Recent Patterns of Women's Participation in U.S. Corporate Governance

Longstanding research across multiple social science disciplines has examined the current and historical role of women in the U.S. corporate governance labor market. We know that women's participation in top leadership roles as executive officers and board members of large corporations is currently limited (Catalyst, 2006a, 2006b) and various explanations for this disparity between the sexes have been presented conceptually and explored empirically in the literature. In this section we present a categorization of the range of conditions credited with delivering the sex-based disparity in women's leadership we see in business today. Note should be made that the categories are not mutually exclusive; in fact, quite the opposite. For women as a class, these categories are interwoven and exist at multiple levels of analysis (individual, group, organizational, societal). They result from women's choice, from conditions imposed on women, and as the result of institutionalized conditions that result in discrimination without intentionality. Not all women face each situation in the course of their career and a review of women in business demonstrates that individual women have learned to manage across this spectrum with skill and aplomb.

Barriers to Participation, i.e., Sex Discrimination Arising from Direct Bias and/or Institutional Factors

Institutional factors help explain occupational sex discrimination as they also encompass cultural factors (Fischer, 1987) including discrimination that is unintended, but still real. Companies are slow to remove obstacles to women's careers (Oakley, 2000) such as the subtle norms that funnel women into human resources careers or create impediments to successful work because of childcare responsibilities (Meyerson & Fletcher, 2000). Some firms simply ignore complaints about discrimination (McGeehan, 2004) or make less effort to support women who seek a balance between work and family responsibilities, because it is assumed that successful corporate women must give up family time (Ng, 2004). Firms that do have more women in top management are more likely to have lower managerial salaries, higher turnover, and emphasize promotion and development (Goodman, Fields, & Blum, 2003).

Preconceptions and stereotypes of women are seen as one of the primary reasons holding women back from top management (McShulskis, 1996). Gender schemas affect how women are evaluated by their supervisors and what attributions are made regarding their successes (Eagen, Bendick, & Miller, 2002) as well as their competence, leadership skills, and assertiveness (Van Vianen & Fischer, 2002). In one study, both sexes showed a preference for hiring male job applicants even when women had the identical background (Steinpreis, Anders, & Ritzke, 1999). Women...

NOTE: All illustrations and photos have been removed from this article.



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