Where are the women? They're out there, but they're not settling for second best.

The prevailing wisdom of the early 1990s was that women would soon be entering the C-suite in great numbers. Women had begun assuming management positions, and new CEOs seemed to be shattering stereotypes--and the glass ceiling.

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Yet the dearth of women in senior ranks today is palpable. Carly Fiorina's exit in February brought the number of Fortune 500 women CEOs down to a paltry seven, and the benches below are hardly representative of the gender makeup of the work force. So what's the problem? Have women opted out in droves for full-time child-rearing, as the media hype suggests?

Not even close, says Tierney Remick, managing director of global consumer markets for Korn/Ferry International in Chicago. Some may be opting out of big corporate life, she argues, but they're not heading for home. Rather, they're turning to small and mid-size companies with cultures that value diverse leadership styles and where they can make a genuine impact, and not just be tokens for diversity. As a result, Remick argues, the top U.S. companies are losing talent. If they want to stay on top, she notes, CEOs need to figure out why they're losing their best women. Here are excerpts from a conversation.

If women are not opting out, where are they going?

What you're seeing is women making different choices about how they want to continue their careers. They're not staying within a corporate structure that they view to be inflexible or non-accommodating or not celebratory of diversity of thought. They're not fleeing the work force, however. Today 50 percent of the private businesses out there are run or owned by women. It's a growing segment of our corporate population, the fastest growing area for women in leadership.

So let's say right now there are 21 million small businesses, generating about $2.5 trillion in sales and employ 19 million people in the U.S. That's a significant work force being impacted by women in leadership.

In bigger companies, is there still a fear that promoting women--who might opt out--is riskier?

That's an excuse. At the end of the day, if you have a woman who is ambitious and wants to continue working and she's able to work in an environment that allows her to develop her personal life as well as her professional life, she'll stay. If she feels that's being held against her, she will leave; she will make choices. Frankly, a man has some of the same issues in getting used to being a parent. They don't have to bear the child, but it's not as if they don't care. Men are going to the baseball games and the soccer games. Men are leaving early to go to the school plays. It's not just a one-sided argument.

Do women come to you seeking to switch jobs because they find their company cultures inhospitable?

All the time.

What's the most common complaint?

They say, "I want to be in a position where I can add value and either the corporate politics or the structure or the CEO isn't creating that environment."

As the next generation moves up and takes the CEO chair, will they have a different attitude?

I though that was the case 10 years ago. I think it's your experience base. Decisions begin to change when you have a daughter or wife who's been impacted by some of the questions we've asked, when it becomes more personal or you see your competition do something that you could have done if you'd been aware of the opportunity. If you've never been in a company that celebrated diversity, when are you going to start?

Which industries are excelling?

Consumer products and services, retail, entertainment. Some would argue financial services but I would say no, personally. I think progress has been made, but I don't think it's a place where women can excel. The areas that are the fastest growing are health care, pharmaceuticals and biotech. I wouldn't say the high-tech world. Maybe small-cap tech but not traditional high tech. Look at Microsoft, Dell, HP, Intel, Oracle. I wouldn't consider them hotbeds of women leadership. IBM, yes. But the others, no.

But look at Oracle, at Microsoft, at Dell. If a lack of women leaders hurt them, wouldn't that show up in their bottom lines?

That's a good question, but I would argue, look at Avon, look at some of the entertainment companies, look at retail. Look at the European companies that are led by women. And if you look at some of the challenges facing the technology industry and the consolidation you're seeing, is that because they don't have diversity of opinion, of thought and of leadership? Look at the telecommunications industry, the consolidation, it has essentially become commoditized. That's not a gender issue, but tremendous consolidation is impacting those businesses. Are they really truly diverse? Where is the innovation coming from? Where is the growth?

I look at the products that have really impacted our lives. Research in Motion, for example, was a tiny little company that has transformed the tech space with its BlackBerry. That's where the innovation came from. It didn't come from IBM or Microsoft; it came from RIM and now they're all trying to get it duplicated. Look at entertainment; much more innovation and risk came from the small independents, backed by a lot of different investors, not necessarily the big players.

The media regularly reports that women are shunning senior roles. Is the coverage wrong?

The media perpetuates the problem, no question. Because there are so few female CEOs, they are targeted very differently than the 490-plus other CEOs who happen to be men. If you look at the success and failure contributions of CEOs, the negative attacks on women are much higher in general than the negative attacks on men. If Carly Fiorina had been a man, would she have been treated the same way in the press that she was?

How would she have been treated differently if she were a man?

I think there would have been a much higher level of forgiveness, and her style would have been made less of an issue. If a woman's tough, she's a bitch. If a man's tough, he's strong. You don't use the same adjectives to describe styles for different genders. If she's too soft, it's because she's a woman, not because she may have a different style. If Carly had been a man, she wouldn't have been on the cover of every magazine as often as she was. She wouldn't have been targeted for certain decisions as harshly as she was. It doesn't mean the decisions wouldn't have been made the same way nor does it mean the board wouldn't have come to the same conclusion. But it surely wouldn't have been represented the same way.

So what will be the outcome of this shift, of women leaving large companies for smaller ones?

The outcome is your innovation and growth and your entrepreneurialism is going to come from the midcap, which is going to create a different kind of challenge for the Fortune 500. You're not going to wipe out the Fortune 500 companies, but what you will see is innovation and growth and true advancement in technology and service and manufacturing coming from midcap companies where they are celebrating diversity and pushing the envelope faster and more aggressively.