Sector News

More women are replacing male CEOs

January 30, 2017
Diversity & Inclusion

If companies including Mattel , Hertz, Hershey and Staples are any indication, we may see more women in chief executive positions soon.

The number of women who took over CEO roles increased for the third year in a row in 2016, according to research from the consultancy firm Challenger, Gray & Christmas. Of 1,043 CEOs that were replaced in 2016, 193 (18.5%) were replaced by women. In 2010, 116 out of 943 replacement CEOs were women, just 12.3%. Challenger analyzed news articles, SEC filings and company press releases to track “as many CEO changes as possible,” a firm spokeswoman said. Its sample size includes companies across industries and includes large and small firms.

Despite this increase in women taking over the C-suite, the genders are still far from equally represented in the corporate world, several experts said.

“By no means have we taken care of all the things we have to take care of,” said Deepa Purushothaman, a managing principal at the financial services and consulting firm Deloitte who heads the company’s women’s initiative.

What is holding women back

Of all the companies that are part of the S&P 500, just 22 have CEOs who are women, according to an analysis by the nonprofit research group Catalyst, that aims to increase inclusion for women at work. (This doesn’t include three women who have been named incoming CEOs but haven’t yet taken that office: Margaret Georgiadis who will become CEO of Mattel in February and Geisha Williams and Michele Buck, who will become CEO of PG&E Corp. and Hershey, respectively, in March.)

“If you really want to make a dent in the overall number at the top of the house, the appointment rate needs to be a lot higher,” said Brande Stellings, the vice president of corporate board services at Catalyst.

Women of color are particularly underrepresented in the C-suite of these well-known companies; not one of the CEOs in that index has a black woman at the helm, Catalyst found.

There are also some biases that hurt women more than men, said Catherine Hill, the vice president for research at the American Association of University Women, a nonprofit based in Washington, D.C., that promotes equality for women.

“People are comfortable with women being successful and accomplished in pretty much any field,” she said. “But there is still a hesitancy to see women as leaders.”

In general, those who respond to surveys about women in leadership tend to say they are not biased against women. But AAUW designed a survey on its website in conjunction with researchers from Harvard University and found that when answering questions about men and women in leadership, people tend to rate women as being slightly less competent than men in leadership positions.

Women who are seen as “too feminine” are sometimes viewed as less competent, whereas those seen as “too masculine” are criticized for not fitting their traditional gender role, Hill said.

Research has also shown that women tend to be picked for leadership roles when companies are already in crisis, a phenomenon known as the “glass cliff”; when women can’t turn the companies around, those watching tend to ignore the fact that they were already on a downturn to begin with.

What ambitious women can do

As long as these biases exist, women aiming for the C-suite have to be strategic, the experts said.

Because traditionally “feminine” women are sometimes viewed as less competent, women can better position themselves for chief executive positions by being aware of that bias and promoting their own skills and competencies, Hill said.

Women will also benefit from using their networks to find support within their own companies, even if those in positions above them are men, said Purushothaman, who was Deloitte’s first Indian woman to become a partner in its consulting practice.

“I didn’t see someone who looked exactly like me,” she said. “Instead, I found male, white partners who I had things in common with, although maybe I had to have several conversations to find out what that sense of connection was.”

Women should also seek positions on corporate boards; not only will they gain experience in strategic thinking, but research has shown that more women on corporate boards also has led to more women in chief executive positions as a result, Stellings said.

She also suggested that women hoping to be chief executives should focus on holding revenue-producing positions: those in departments such as sales or that support a particularly visible and desirable client, for example. This type of experience tends to lead to a chief executive position, unlike jobs that “support” the business in positions such as human resources or as a general counsel, Stellings said.

“Go where the money is.”

By Maria Lamagna

Source: Market Watch

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