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New study exposes “gender tenure gap” and supports the glass cliff theory

by News Desk

Female CEOs typically have shorter tenures compared to their male counterparts, a new study has found. This “gender tenure gap” sees women leading companies on stock exchanges around the world such as the  FTSE 100 and ASX 200 for shorter periods than male leaders. 

The study looked at companies listed on 12 global stock exchanges to reveal that on average, female CEOs lasted 5.2 years as in their roles while male CEOs had roughly 8.1 years. 

The analysis looked at companies from several stock exchanges, including companies in S&P 500, Nikkei 225, HANG SENG and DAX40. Only companies in the NSE Nifty 50 had women CEOs stay in their roles longer than men.

The study, conducted by executive search and leadership advisory firm Russell Reynolds, used data collected since 2018 to make the latest conclusions. 

Despite the addition of 21 new female CEO appointments in the first three quarters of this year, the number still only makes up 13 per cent of all newly appointed CEOs.

In the FTSE 100, there are currently nine women who are leading companies, though this year, there were no new female CEOs appointed at all. 

The UK head of Russell Reynolds, Laura Sanderson attributes the tenure gap findings to some male CEOs having led companies for decades. 

“While the sample size is too small to be significant, we also need to consider whether the data may support the glass cliff theory,” Sanderson told The Observer

The study also found that CEOs who were internally appointed have a longer tenure — on average, they had a 1.8-year longer tenure than those who are externally hired. 

Professor Michelle Ryan, the director of the Global Institute for Women’s Leadership at the Australian National University in Canberra, described the latest research as “robust” and one which “added to the body of work in this area”.

“If women are more likely to take on leadership roles in times of crisis, then it follows that their time is office is likely to be stressful, more heavily scrutinised and shorter in tenure,” she told The Observer.

“This reduced tenure could be for a number of reasons – because there is often higher turnover in times of crisis, because they are judged as not performing well, even though poor performance was in train before their appointment, or because when things start to turn around, men come back into leadership roles.”

The latest research builds on the research Prof Ryan did with her colleagues at the University of Exeter in 2005, which found that women were more likely to be appointed as board members after a company’s share price had done badly.

The phenomenon, called the glass ceiling or the glass cliff, sees women appointed as leaders when an organisation is going through a crisis — meaning their appointments are precarious and more likely to see them not succeed. 

A handful of new initiatives are attempting to turn the tide of these gender disparities, including the government-supported FTSE Women Leaders, which is working to grow the number of women on boards of companies in the FTSE 350 and 50 of the largest private companies in the UK.

Denise Wilson, the chief executive of FTSE Women Leaders described the latest gender tenure gap study as “an important piece of research”.

“From a UK perspective, we have made significant progress for women in almost every metric and measure,” she said. “But the CEO has been the stumbling block where we are struggling to make progress.”

“I think men can enjoy a greater followership – support within the organisation. They can suffer big setbacks and rise again. Women who have been CEOs tend to go off to an alternative career.”

“People tend to line up very quickly under the boss, but when that person is no longer as secure as people thought, that can gather momentum.”

Fortunately, it’s not all doom and gloom. 

On the boards of FTSE 350 companies, the number of females has increased from 9.5 per cent in 2011 to 41 per cent. 

Laura Sanderson from Russell Reynolds believes that “getting more women on boards generally has been working in terms of also getting more women into the CEO succession.”

“One of the things I say to clients is that if you can have a non-exec on your board who could be a potential successor, that’s just good succession planning,” she said.

The post New study exposes “gender tenure gap” and supports the glass cliff theory appeared first on Women’s Agenda.

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