Where Are the Women CEOs?

In business and in politics, few women have made it to the top—none in politics in the United States, as seen with Hillary Clinton’s recent loss in the 2016 presidential race. And Catalyst reports that the percentage of female CEOs of Fortune 500 companies has been stuck at 5 percent for a very long time. Why has there been so little progress? One factor explaining the dearth of female CEOs is described by Katrin Bennhold of the New York Times as the phenomenon of the glass cliff. The concept of the glass cliff, coined in 2005 by two professors at Exeter University in the United Kingdom, posits that “women are often placed in positions of power when the situation is dire, men are uninterested and the likelihood of success is low.” Bennhold gives the example of the election of Theresa May to prime minister of the United Kingdom right after the Brexit vote, which put her immediately into a lose-lose situation where her chances of success were very low. Bennhold goes on to note that all the men responsible for Brexit “stabbed each other soundly in the back” and ran away. Julie Creswell writes that researchers at Utah State University also report that women are more likely to be promoted to the top job of troubled companies and then “[lack] the support or authority” to make necessary changes. In other words, women are less likely to succeed in glass cliff appointments, and their tenure is often shorter because they are under conditions detrimental to success. Susan Chira of the New York Times describes other factors that contribute to the low number of female CEOs, based on interviews she conducted with dozens of senior women who competed to be CEOs but did not succeed. These women concluded that the barriers for women are “more deeply rooted and persistent than they wanted to believe.” They reported these barriers:

  • Women are not seen as visionary.
  • Women are less comfortable with self-promotion and more likely to be criticized (and villainized) when they do grab the spotlight—and they are often perceived as unlikeable.
  • Men continue to be threatened by assertive women.
  • Women are disproportionately penalized for stumbles.
  • Most women are not socialized to be unapologetically competitive and can be caught off guard by the ruthlessness of competition at the top. One executive explained, “Women are prey . . . They [men] can smell it in the water, that women are not going to play the same game. Those men think, ‘If I kick her, she’s not going to kick back, but the men will. So I’ll go after her.’”
This latter point may also explain research from Utah State University, as reported by Creswell, showing that female CEOs are 34 percent more likely to be targeted by an activist investor who forces them out. A study from Arizona State University found that, out of all chief executive appointments from 2003 to 2013, one in four women-led companies were attacked by activist investors. What can be done? Chira notes that Deborah Gillis, president and chief executive officer of Catalyst, says that it’s not enough for leaders and boards to pay lip service to valuing diversity and advancing women and minorities. They need to put their money where their mouth is by withholding bonuses from leaders if they do not promote women and minorities and increasing bonuses if they do. They must also continue to grow the number of women on corporate boards. More women are seriously considered for CEO appointments when women are board members. Without these efforts, the deck is stacked against women getting the chance to demonstrate leadership from the top.   Image courtesy of businessforward (CC BY 2.0)]]>

Male CEOs with Daughters Are More Socially Responsible Leaders

I just came across an interesting new study, reported in the Harvard Business Review (HBR), showing that companies run by male executives with female children rated higher on measures of corporate social responsibility (CSR), defined as “measures of diversity, employee relations, and environmental stewardship,” than is true for comparable companies led by men with no daughters.  This means that male CEOs with daughters spend significantly more net income on CSR priorities than is true for other companies (unless the CEO is a woman, but more on this later). Alison Beard, writing for HBR, reports on this research by Henrik Cronqvist of the University of Miami and Frank Yu of China Europe International Business School, who examined the CSR ratings of S&P 500 companies tracked between 1992 and 2012 and compared the CSR ratings for male executives with male and female offspring.  Beard notes that other researchers have found similar results on voting records for US congressmen who have daughters and for the decisions of US Court of Appeals judges with daughters.  Here are some of the findings:

  • Male CEOs with daughters spend significantly more net income on CSR than the median. Cronqvist and Yu explain that the literature in economics, psychology, and sociology support the notion that “women tend to care more about the well-being of other people and of society than men do, and that female children can increase those sympathies in their parents.” They hypothesize that because the median age of S&P 500 CEOs in the research sample was fifty-seven, these male CEOs may have seen their daughters discriminated against in the workplace and become sensitized to issues of inequality.
  • Male CEOs with only sons did not spend more on CSR.
  • Male CEOs with female spouses and no daughters did not spend more on CSR.
  • Research from Yale University by Eboyna Washington shows that US congressmen with daughters tend to vote more liberally, especially for legislation involving reproductive rights.
  • Beard reports on research by Adam Glynn of Emory and Maya Sen of Harvard that found similar patters among US Court of Appeals judges in cases involving gender issues.
As for female CEOs, Cronqvist and Yu had only a small sample of them available in their study, so they could not draw firm conclusions.  They did make these interesting observations that are worth noting:
  • The companies in their sample with female CEOs had much stronger CSR ratings in every category—diversity, employee relations, environment, product, human rights, and community—than did those of the male-led companies.
  • The researchers calculate that a male CEO with a daughter produces “slightly less than a third of the effect of having a female CEO. Comparisons of the data on congressmen and judges yield similar numbers.”  They conclude that “any man behaves one-third more ‘female’ when he parents a girl.”
These findings add to the growing body of research showing that gender does influence the decisions of leaders, legislators, judges, and other decision makers, in one way or another.  Doesn’t it make sense to have more gender-balanced representation in all decision-making arenas? Photo courtesy of Ruben Diaz, Jr.. CC by-nd 2.0]]>

Taking a Stand for Women on Boards: The Fearless Girl and the Bull

Could a bold and creative act by the Boston-based State Street Global Advisors (SSGA) finally bring gender equity to corporate boards in the United States? When senior female executives at SSGA decided to commission the statue “The Fearless Girl,” their goal was to bring visibility to the lack of women on boards. By placing the statue in front of New York City’s iconic Bull of Wall Street in during the middle of the night prior to International Women’s Day on March 9, 2017, they hoped to spotlight this issue. Rachael Levy, writing for Business Insider, explains that the statue is part of a new campaign by SSGA to pressure companies to add more women to their boards. Levy reports that—as the third largest asset manager in the world handling $2.5 trillion in funds—SSGA wields a lot of clout and has vowed to vote against boards of companies “that fail to take steps to increase the number of women.” The SSGA executives note that, despite much industry discussion about this issue for many years, little has changed. Why does gender diversity matter? They add that gender diversity improves company performance, and gender diversity increases shareholder value. In other words, gender diversity is good for business. Associated Press reporter  Stan Choe writes that while woman have been gaining board seats, the progress is very slow. Women in the United States held 15 percent of board seats in 2015, up from 14 percent in 2014. Choe notes that, at this rate, it will take until 2055 to gain parity. He also notes that many companies have no women at all on their boards, and only 4 percent of CEOs are women. Other countries have a better record, with women holding 24 percent of board seats in Europe because of government pressure and targets. Shirley Leung of the Boston Globe notes that the placement of the Fearless Girl statue raises some important questions:

  • Why haven’t women been on equal footing?
  • Why shouldn’t they be?
  • Why does the Wall Street Bull, a decidedly masculine symbol, represent America’s economic strength?
Leung explains that for the SSGA executives, who commissioned the statue from artist Kristen Visbol, the little girl represents hope for the future and is a symbol of change. The plaque at her feet reads, “Know the power of women in leadership. SHE makes a difference.” I love this symbol of fearlessness. What are your thoughts and reactions?   Photo by vivalapenler. istock standard license]]>