Troubling disadvantages against women CEOs, study finds

Women CEOs face some troubling disadvantages, compared to the challenges that men face, a new study has found. Women CEOs in America, for example, get less pay than men. They also have shorter tenures, and the stock market punishes their companies. The stock market punishes their companies even when they are as profitable as those with male CEOs.

Michael Holmes and colleagues wrote about their study in the journal Organizational Behavior and Human Decision Processes (citation below). Holmes is Florida State University’s Jim Moran Associate Professor of Strategic Management.

The researchers found that women are less likely to be on the chair of the board of their companies. They also have a much harder time getting to the top job. They have a tougher time because there is considerably less demand for female leadership compared to male leadership.

Challenge for women CEOs – an eye-opener

Regarding their research and findings, Prof. Holmes said:

“This research should be eye-opening to people, and I hope they take a closer look. We hope this sets the record straight on past research, some of which has produced conflicting results, and now people can build on this aggregation of findings.”

Prof. Holmes, Gang Wang, Richard A. Devine, and John Bishoff carried out an exhaustive study. They focused on the influence of gender on the careers of CEOs. CEO stands for Chief Executive Officer. A CEO is the top active person in a company.

Gang Wang is Assistant Professor and Dean’s Emerging Scholar at FSU’s College of Business. Richard Devine is a Researcher at the American University’s Department of Management. John Bishoff is from Spanish Fork, UT, USA.

The authors, all business management experts, carried out a meta-analysis. In a meta-analysis, the researchers use a statistical approach to combine the results of several studies.

They gathered and analyzed data from more than 158 studies covering several decades. The studies investigated companies’ hiring choices, gender, and what impact those choices had.

Underrepresentation of women CEOs

One of the major findings in their research was an extreme underrepresentation of women CEOs.

The authors quoted the Pew Research Center, which showed that 5.4% of Fortune 500 companies in 2017 had female CEOs. Amazingly, 2017 was an all-time high in the USA.

Regarding the situation for women CEOs, Prof. Holmes said:

“The situation for women leaders is probably worse than you think right now. Many women who become CEOs are absolute rock stars.”

“They have graduated from elite schools and risen through the corporate ranks faster, but they get paid less, are less likely to be a firm’s board chair, have shorter tenures in the job and are more likely to lead distressed firms. We wondered, ‘What’s going on here?'”

That question prompted Professors Holmes and colleagues to embark on a project that lasted two-and-a-half years.

Their study identified several factors that undermine the chances of success for women CEOs. Specifically, their success among corporate boards, stock market investors, and across American culture in general. Their study also identified the factors that hinder women CEO candidates.

Two marketplace forces

The researchers grouped the factors into demand-side and supply-side influences. In other words, they grouped them into two basic marketplace forces that undermine women’s ability to become CEOs. Marketplace forces or market forces are the forces of supply and demand.

Demand-side factors

Demand-side factors hinder demand for women CEOs by limiting companies’ willingness to hire females for the job.

In-group favoritism,’ for example, is a phenomenon that causes individuals to view others who are similar to them as more competent.

In today’s corporate world, men dominate leadership positions and company boards. Therefore, leaders, who are mostly men, tend to hire people like themselves; in other words, other men.

The hiring process for CEOs is susceptible to gender-role stereotype influences, the researchers also found.

In the culture of the USA and many other countries, men have the perceived traits of a good leader. People generally see aggressiveness and risk-taking, both characteristics of a good leader, as masculine qualities.

In the paper, the authors wrote:

“Because of that bias, men have advantages obtaining and succeeding in leadership positions, while women leaders are more likely to be disliked and viewed as socially inept, due to the perceived role incongruity.”

Supply-side factors

More women decide to leave the workforce than men. Reasons may include a lack of career advancement or family changes. Sometimes it is a case of outright discrimination.

A larger sociological influence

From early childhood, parents and others encourage males to display traits associated with leadership. Being pugnacious, aggressive, and forceful, for example, are traits that many people admire in boys.

Those characteristics are not so common in women. Prof. Homes suggests that this may be because we raise females differently.

Regarding the upbringing of males and females, Prof. Holmes said:

“Females are more likely socialized to care for the home or be nurturing. Men start to develop characteristics that might help them become a CEO early in childhood, whereas fewer women do. That reduces the supply of female candidates for CEO jobs.”

Women CEOs and the stock market

There was a clear bias against women CEOs in the stock market, the researchers found.

They compared companies with similar results using accounting metrics. They found that firms led by women CEOs experienced inferior stock performances compared to those where men were leaders.

The authors wrote that stock market analysts and investors are mostly men. They probably have less experience with women CEOs and are influenced by in-group favoritism. They may also have seen more women opting out of careers and still have a gender-role stereotype view.

As a result of these factors, many investors treat companies with women CEOs more harshly, the authors concluded.

Investors subconsciously discount firms with women CEOs

Prof. Holmes said:

“Women have come a long way in the workforce in terms of their overall numbers and acceptance, but when it comes to stock market investors evaluating a CEO and a company that they don’t know, I think investors may subconsciously discount that firm because the leader is female versus male.”

“It seems when investors take an overall look at firms, biases creep in, and people may not even be aware of them.”

Future studies should focus on how to reduce biases resulting from demand- and supply-side forces. Too many women have opted out or were pushed out of their careers because the odds were stacked against them. In other words, they faced an uneven playing field which pushed them out or made them want to leave.

Practical ideas

The authors say their study provides young women with practical ideas. Specifically, young women who want to become CEOs one day.

Pursuing early and fast promotions, for example, can be an effective option. Research shows that women who manage to become CEOs tend to have fewer years of experience than their male counterparts.

Prof. Holmes said:

“These women have earned their place at the top. But the data shows things are different for women — the workforce does not offer a level playing field.”

“I hope when people read the research, they have some ‘aha’ moments with the findings, as well as the explanations. By showing these firms perform the same as companies led by male CEOs, let’s get beyond the idea that women can’t be good leaders. Clearly, they are good leaders. They often just aren’t rewarded equally.”


“CEO gender differences in careers and the moderating role of country culture: A meta-analytic investigation,” Gang Wang, R. MichaelHolmesJr., Richard A.Devine, and JohnBishoff. Organizational Behavior and Human Decision Processes, Volume 148, September 2018, Pages 30-53.