Some US schools are approaching or have hit gender parity in their MBAs. Why has this not increased gender diversity in corporations to the same degree? Diversity was the most important quality Laura Derry sought in business schools when she decided to quit her Deloitte consulting job to pursue a joint MBA/MD. “As future business leaders, we don’t want our organizations to be homogenous. So, our business schools should not be either,” she says. 

The Fuqua School of Business’ heterogeneous MBA cohort stood out to Derry, who hopes to pair her medical and business acumen to rethink the ways healthcare is organized, financed and delivered. Fuqua’s Class of 2020 boasts its highest ever percentage of women (42 percent) and a high proportion of international students (38 percent). Derry saw Fuqua’s diversity first hand while attending its “Weekend for Women”, a three-day event run by the admissions team and Association of Women in Business, where 170 female MBA aspirants visit campus each year to get a feel for the school, and tips for the MBA application. 

She was admitted to Fuqua with a generous scholarship from the Forté Foundation, a nonprofit organization that strives to increase the number of women in business, which has awarded more than $142m to some 6,300 “Forté Fellows” since 2003. “I’m a firm believer in the impact that diversity of thought and perspective can have on an organization,” says Derry, citing research showing gender and ethnic diversity can lead to improved financial performance. “In business school, where we learn just as much from our classmates as our professors, this characteristic is critical to a well-rounded and stimulating education.”

 Overall, many MBA programs are recruiting fewer women than menFinancial aid and recruitment events are just two of the many ways business schools are trying to recruit more women into their MBA programs. Despite these efforts, the proportion of women who received full-time MBAs from US schools had stayed below 38 percent between 2012-2017, according to accreditation agency AACSB International.

And since 2012 the number of women applying to full-time MBAs had “hit a plateau”, according to a 2017 report from the Graduate Management Admission Council, which runs the GMAT. The drive to recruit women MBAs may be crucial to US schools in the coming years, as many elite institutions experienced a worrying drop in 2018 applications, among them Fuqua, Harvard and Stanford. For women, financial concerns are the top barrier to accepting a business school place, according to a GMAC survey. Some 29 percent of women cited this globally and 38 percent in the US. In comparison, the main reason why men did not accept MBA places was because they were waiting for another offer. These statistics are explained partly by the gender pay gap. MBA programs usually require several years of professional work experience.

During that time, women are more likely to work in lower-paying industries than men, and the pay gap means some women are on lower salaries. They may have less money to spend on a pricey MBA (the tuition fees alone are about $140,000 at a top US school). “For women, research tells us that in order to attain the same level of success and financial gain as their male counterparts, they have to go farther in their educational pursuits and receive an advanced degree like the MBA,” says Elissa Sangster, chief executive of the Forté Foundation. An MBA can have a significant impact on women’s careers. They earn $152,806 on average post-MBA, a 63 percent increase on their pre-MBA pay, according to Forté research. 

 However, the global study of 900 business school alumni, showed the gender pay gap actually increased from three percent before candidates’ started their MBAs to 28 percent today. Men also headed bigger teams in their jobs, with an average of 3.3 direct reports, compared with 1.8 for women. This is due to unconscious bias in the workplace, companies’ failure to closely monitor compensation practices, and a lack of high-visibility projects for women, says Sangster. 

The pay gap can also be explained by the industries MBA graduates worked in. For example, more women than men worked in finance, a sector where men earn 60 percent more than women on average. Technology had among the smallest gender pay gaps, but fewer women than men worked in the industry.  

To close the gap, MBA students at the Haas School of Business at University of California Berkeley, created a spreadsheet of their compensation. “Data collection and transparency of results are significant levers of change. Knowledge is power,” says Kellie McElhaney, founding director of the Center for Equity, Gender and Leadership at the school. In terms of gender parity, some b-schools are making stridesSome top schools have been especially successful at providing career support for women, and recruiting them in the first place. In the US, parity is not too far off.

One top US business school, USC Marshall, has parity, with women comprising more than 50 percent of its MBA. At about 19 other schools, the proportion of women in MBAs is 40 percent or higher, according to Forté. “Women are still underrepresented in executive roles in business, and we are committed to changing that,” says Sharon Thompson, Fuqua’s assistant dean for admissions. “By being intentional in our efforts to attract more women into our MBA, we are building the pipeline of future women executives.”

The proportion of women in Fuqua’s MBA today, at 42 percent, is a significant increase from 32 percent in 2013. But why has the increase in gender diversity in MBA cohorts not translated into a proportional increase in gender diversity among the companies that hire from them? Three-quarters of boardroom appointments are still going to men, according to Egon Zehnder, the global search company, which examined 1,610 public companies in more than 44 countries. Sangster points out that a relatively small number of schools are approaching gender parity in their MBAs, and among those schools, their graduates are relatively early on in their careers.

 “We need to see steady, consistent results showing MBA classes at 50/50 before business will begin to see a shift,” she says. “And until we see more women advancing into senior leadership roles, the C-suite and on corporate boards, true change won’t be recognized.” McElhaney agrees. “If we are not working to change the culture and biases that exist, and implementing policies that address barriers to keeping women in the company and successfully on route to leadership positions, then we will not make traction.”