Why Are There So Few Women in the C-Suite?

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A new study finds that despite progress on gender equity, there seems to be an implicit quota on women holding senior positions at large companies.

Bottom Line: A new study finds that despite progress on gender equity, there seems to be an implicit quota on women holding senior positions at large companies.

The percentage of women in top management positions at S&P 1500 firms has risen only slightly during the last two decades — from 1.6 percent in 1992 to 8.7 percent in 2011. In 2011, only 3.7 percent of CEO positions were filled by women. Since then, the number has flatlined.

If discrimination against female workers has diminished in the past few decades and many tropes about the ability to balance a family and a career have been debunked, why aren’t more women rising up the ranks of big companies? And shouldn’t the presence of even a few female CEOs lead to a self-reinforcing effect that leads more female colleagues to join them in the executive suite?

A new study provides an illuminating, if disheartening, answer to these questions. Women in senior management jobs at top firms appear to be held back by an implicit quota. And the presence of another woman at the apex of an organization actually reduces the chances that a female colleague will join her.

Leading companies don’t consciously implement a gender-based quota, the authors posit. And they do invest significant resources in a recruitment and promotion process that seeks to ensure there’s at least one woman in a top management slot. But all too often, it’s literally one woman — which enables top firms to put a face on gender diversity efforts for media and shareholders without fundamentally upsetting the male-dominated status quo. The effect is that women senior executives tend to be scattered across different large companies, without clustering together at particular organizations.

Statistically analyzing and isolating the factors that predict female representation at the senior level of leading firms has proven a vexing research challenge. This study is one of the first to empirically examine the issue. The authors combined several databases that contained information on the top management teams at S&P 1500 firms over a recent 20-year time frame. They then employed spatial analysis — a relatively new methodology used to map trends in criminology, epidemiology, geography, and environmental sciences — to compare the actual distribution of women across S&P 1500 firms against what should be expected on the basis of data about the companies, individuals’ career trajectories, and the demographic makeup of top management teams.

Overall, the authors found convincing evidence of a negative spillover effect. The probability that a woman will hold a leading role at a firm is 51 percent lower if another female is in the top management group.

“The basic argument is that, while firms gain legitimacy from having women in top management, the marginal value of this legitimacy declines with each woman, whereas the perceived costs, from the perspective of the male majority in top management, may increase with each woman,” the authors explain.

Delving deeper, the researchers found that any small positive spillover effects were limited to professional supporting roles, such as chief accounting officers or human resource supervisors. Such effects rarely extended to line positions with more profit-and-loss responsibility, such as chief operating officers or subsidiary heads. So even when multiple women served on the same top management team, their power tended to be dispersed and didn’t necessarily change the firm’s fundamental power structure.

At the same time, the authors cast doubt on the existence of the “queen bee” syndrome. This controversial theory was first advanced in the late 1960s, suggesting that women may benefit by being the “token” member of a top management team and have every reason to resist the appointment of other female executives.

Any negative spillover effects that result from queen bee syndrome should flow most obviously from a female CEO to other women in contention for top management roles, especially line officers. After all, these are the women who would be the most viable internal candidates to replace a struggling CEO, or whose poor performance could reinforce negative stereotypes about women in management and thereby undercut a female CEO’s grip on power.

Women CEOs were more likely than their female colleagues farther down the corporate ladder to bring another woman into the executive suite.

But the authors found the exact opposite of what the queen bee scenario would predict: Of all female management positions, female CEOs had the smallest negative spillover effect on fellow women, especially those at the line officer level. Put another way, women CEOs were more likely than their female colleagues farther down the corporate ladder to bring another woman into the executive suite.

Female representation in top management did increase, however, when companies had more women on their boards of directors. And several European nations have implemented or suggested a quota for women’s representation on corporate boards to address this very issue. Although directors have historically had less influence over key appointments than top managers have had, U.S. stakeholders might do well to consider petitioning their boards about gender equity issues and perhaps instituting larger quotas.

Source:Is There an Implicit Quota on Women in Top Management? A Large-Sample Statistical Analysis,” by Cristian L. Dezső (University of Maryland), David Gaddis Ross (University of Florida), and Jose Uribe (University of Michigan), Strategic Management Journal, Jan. 2016, vol. 37, no. 1

Matt Palmquist

Matt Palmquist is a freelance business journalist based in Oakland, Calif.

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