Why Women CEOs Are Fired More Often Than Men

Why Women CEOs Are Fired More Often Than Men

When we talk about gender equality in upper management, we usually talk about confidence, implicit gender bias, the "mommy penalty" and earning respect in the workplace.

Turns out women who break through the glass ceiling have to wade through the shards.

Strategy& released a report in April based on 10 years of data related to women in CEO positions. Women made up only 3 percent of incoming CEOs in 2013. Based on data analysis and anticipated growth rates, Strategy& estimates that women will make up one-third of incoming CEOs of the largest 2,500 companies by 2040.

Ignoring the fact that it will take 26 years to achieve nothing near gender parity, there are signs that women's leadership -- both its perception and implementation -- is moving in the right direction. While there is reason to believe women will confront fewer barriers to entry for higher-level positions, troubling patterns seem to emerge once they get there: Women are 10 percent more likely to be fired from CEO positions than men.

Over the past decade, 27 percent of male CEOs left because they were fired, compared to 38 percent of women who were forced out, Strategy& found.

There are several potential explanations for the firing gap. Quartz explains that women are more likely to be hired from outside the company than men (35 percent of women, 22 percent of men), and research shows that external hires are generally less effective than those promoted from within. Still, the relatively risky recruitment of CEO positions from outside the company is itself a product of a gender gap. "That women CEOs are more often outsiders may be an indication that companies have not been able to cultivate enough female executives in-house," Gary L. Neilson writes in the Strategy& report.

But women may be statistically doomed to fail for the precise reason they were brought in to succeed.

Known as the "glass cliff theory," companies often promote women to positions of power in times of corporate crisis. Researchers coined this "the savior effect" after 15 years of data showed increased likelihood of assigning women and minorities to upper management when overall company performance is weak. But as Leonid Bershidsky at BloombergView writes, "When these women fail -- and in a crisis, the probability of failure is higher -- boardrooms fall back on tradition. They replace the women with white men who have lots of industry experience." Bershidksy notes that Marissa Mayer at Yahoo! and Meg Whitman at Hewlett-Packard were both brought in to shake things up.

This suggests -- rather grimly -- that women's access to high-level positions stems from corporate weakness, and it is revoked indefinitely when women fail to repair an irreparable situation.

This is another reminder of the qualitative dimension of gender equality in the workplace. All too often for corporations, having a white man at the top is seen, even if wrongly, as a sign of success. In times of unmitigated crisis, people will revert to what they know. The ousting of relatively "unsuccessful" female CEOs for potentially sociological reasons could have consequences for long-term gender parity.

While historically, external hires tend to be less successful than internal ones, Strategy& found that CEOs recruited from outside generated about the same returns as those promoted from within in 2013. With increasing evidence that companies do not compromise on talent when recruiting from the outside -- and even more evidence that women are equally effective leaders as men -- companies are more likely to cultivate more diverse types of talent.

Women's leadership shouldn't be a novelty that wears off when times get a little rough. Exciting research shows that women are perceived as equally -- if not more -- effective than men, and increasing evidence shows this perception matches reality.

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Before You Go

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