B-School Deans’ White House Pow-Wow

Leading B-school deans in the Roosevelt Room of the White House.

Leading B-school deans in the Roosevelt Room of the White House.

The deans of 14 prominent business schools gathered in the White House yesterday (April 16) to discuss a rather thorny issue: the pay gap between male and female MBA graduates.

The deans met with President Obama’s economic advisors around a long mahogany table in the Roosevelt Room to help the administration create an agenda for a June summit on working families. Besides the gender pay gap, the meeting examined leadership, retention rates, business school culture, and the timing of business school in the lifecycle.

It was a high-powered group which included Nitin Nohria of Harvard Business School, Sally Blount of Northwestern University’s Kellogg School, Richard Lyons of UC-Berkeley’s Haas School, Ted Snyder of Yale’s School of Management, and Judy Olian of UCLA’s Anderson School, among others (see below for full list of deans). “The discussion took a rather free-wheeling path of its own,” says Robert Bruner, dean of the University of Virginia’s Darden School in a subsequent blog post.  “We touched on some of the agenda questions, but did not reach alignment of opinion.”

Of course, women not only start their careers with lower pay, but the pay gap grows over time. One study of MBA graduates from a leading institution found that women earned $115K on average when they graduate and $250K after nine years, while men earn $130K when they graduate and $400K after nine years. Another analysis by the President’s Council of Economic Advisors has shown that a similar trend holds for all men and women with a professional degree—the pay gap grows over time and earnings are more than 50 percent higher for men when professionals are in their late 30s.

A CONVERSATION ABOUT BEST PRACTICES FOR BUSINESS SCHOOLS

As part of the lead up to the White House Summit on Working Families, the administration has been seeking input from a wide variety of stakeholders to identify best practices for developing workplaces. According to Betsey Stevenson, a member of the CEA, and Jason Furman, chairman of the CEA, “We did not think this goal could be achieved without thinking of the business leaders of tomorrow, and that is why today, we met with a group of deans from our nation’s leading business schools to discuss best practices for business schools that can better prepare their students for the increasing importance of women in the labor force and the prevalence of employees with families where all parents work.”

Peter Henry, who had worked on Obama’s transition team before becoming dean of New York University’s Stern School of Business, said there were “big, structural impediments” in workplaces that restrict accommodations for working families. Though part of their task is to train leaders who can eventually tear down those barriers, he said, schools must also create “short-term, tactical solutions” that will foster women’s advancement right away.

Anderson Dean Olian said she wants to beef up alumni career support to help graduates transition back into the workforce after taking time off for children. She also told The Wall Street Journal she wants to increase outreach to young women in high school so they consider business more seriously as a career option.

DISPARITY IN PAY DUE TO LACK OF FLEXIBILITY IN THE WORKPLACE

Haas Dean Rich Lyons said he wants to ensure that his school’s support of faculty research on gender issues is as strong as it is for other research topics. In order for faculty to teach students about the importance of workplace flexibility, they must research success and failure in such programs themselves, he said.

Stevenson and Furman said that one reason for the disparity in pay among MBA grads is the lack of flexibility in the workplace. Surveys of MBA graduates demonstrate that women are penalized due to career interruptions, often from motherhood. Even if women are working, they often must accept positions that offer significantly lower pay or growth opportunities in order to have flexible work schedules to balance responsibilities outside of the workplace. CEA has found that married women with young children contribute less to family earnings than married women without children, likely for this reason. Although some industries have embraced part-time work, flexible work schedules, and policies that make it easier to reenter the workforce after taking a leave, many high-powered careers still lack workplace flexibility and are losing out on talent—both men and women—as a result.

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