Bottom Line: Female CEOs at major companies have less structural power and strategic control than their male counterparts. However, having experience at large firms, an entrepreneurial background, and a degree from a top school can help offset the limitations female managers face.
For female executives, smashing through the glass ceiling is hard enough. But now, a new study suggests that even when women gain the CEO mantle, they typically have less control within their company’s power structure than do their male counterparts at similar firms. There is a silver lining, however: Certain types of companies and personal characteristics tend to give women an edge when they assume power.
Although female executives have become more common at large companies in recent years, they still rarely rise all the way to the CEO position. A 2013 report found that women made up only 4.2 percent of CEOs in the Fortune 500 and 4.5 percent in the Fortune 1000. Because of this small sample size, few studies have empirically examined female CEOs, and even then, this research has typically focused on their dearth and on the concept of the glass ceiling—identifying the subtle but deeply entrenched gender-based obstacles that prohibit women from ascending to the top of the corporate ladder.
This study takes a different view, examining which personal and corporate characteristics are likely to lead women to the top, and whether they will have as much control over their company as their male colleagues do once they get there.
Combining several databases, including the 2011 Financial Times list of the top 50 women in business and the 2011 Money/CNN/Fortune index of female CEOs, the authors came up with a list of the female CEOs at S&P 1000 firms in the United States from 2000 to 2010. They took biographical information from firm websites and disclosure statements, and compiled a sample of male CEOs who helmed firms of similar size and value in the same industries.
As a proxy for executives’ degree of control over their firm, the authors focused on CEO duality—the state wherein the CEO also holds the board chair position. Despite well-documented controversy over this setup, which grants overarching authority to the CEO, a recent report found that 60 percent of U.S. firms were still being helmed by a dual CEO/chair in 2010, and CEO duality remains a widely used measure for assessing how companies allocate power to their top decision makers.
In general, the authors found, there were very few differences in the demographics between female and male CEOs. However, women were much more likely than their male colleagues to be given the dual role of CEO and company president—a far less powerful combination than CEO/chair, with nowhere near the same level of structural control.
“The research suggests that female CEOs, even when [their leadership is as effective as men’s], have the additional challenge of earning legitimacy in organizations that favor and reward stereotypical masculine values and practices,” the authors write. “In other words, women have to work harder than men to prove their worth.”
For a real-world example, look no further than General Motors’ recent announcement that the company plans to appoint its first female CEO, Mary Barra. She will arguably become the most high-profile female CEO in the world. However, whereas Barra’s male predecessor held both the CEO and chair positions, GM is splitting up the roles when she takes over, and handing the chairman position to a male board member.
In conducting their study, the authors found several factors that could influence the amount of power a female CEO has. Tenure at the firm played no part in this duality distinction. Female CEOs who had spent the same amount of time at a company as their male colleagues were still less likely to get the dual role of CEO/chair. Interestingly, however, women with experience at a large company were more likely to gain structural power. As the authors note, this supports the idea that bigger companies offer women more opportunities for development, training, and promotion.
An entrepreneurial background also helps. Women who had founded their own company were just as likely as men to hold the dual CEO/chair position, suggesting that “women get fed up with the male-dominated corporate world and start their own businesses,” the authors write, adding, “There are no glass ceilings when female entrepreneurs head their own companies.”
Furthermore, education plays a part—and what matters is quality, not quantity. Stockpiling degrees didn’t make much of a difference in women’s upward mobility, but earning a degree from an elite university made it more likely that a female CEO would also occupy the chair role. So although having a master’s degree or Ph.D. didn’t necessarily help female CEOs, attending a well-respected university apparently provided them with networking capabilities and an additional source of power, prestige, and legitimacy, the authors write.
For female executives seeking to work their way to the top, these findings paint a daunting picture of what is, clearly, still a tough battle. But women can gain an edge by working in large firms, starting their own company, or aiming for the type of education that brings them social capital and leverage. Given that firms can also mold managers through training and experience, they should try to boost female executives’ upward mobility, and establish more objective standards for evaluating their performance, the authors suggest.
Women can profit by working in large firms, starting their own company, or getting a top education.
“Even though growing numbers of women are becoming CEOs, they are not being awarded the dual role of CEO and chair, a role that would enable them to increase their structural power,” the authors conclude. “Irrespective of their ability, women are still measured with a different yardstick.”
Source: Gaining the Ultimate Power Edge: Women in the Dual Role of CEO and Chair, by Maureen I. Muller-Kahle (Pennsylvania State University) and Eduardo Schiehll (HEC Montreal), Leadership Quarterly, Oct. 2013, vol. 24, no. 5