Women CEO’s More Likely to Get Sacked? Thoughts Behind the Numbers.

By Beth Senko

The recent announcement that Jill Abramson, The New York Times’s first female Executive Editor, was dismissed for “an issue with management in the newsroom” has reignited the discussion about issues faced by women at the helm. The problem for women isn’t merely getting the top job; the problem is keeping the top job.

Opinions vary on the reasons that Ms. Abramson was let go, and The Times’s leadership is facing criticism and concern from both outside and inside its ranks. Some supporters contend that Ms. Abramson was dismissed after she allegedly complained that her compensation package was less than that of her predecessor. In an article for The New Yorker, Ken Auletta wrote, “This may have fed into the management’s narrative that she was ‘pushy,’ a characterization that, for many, has an inescapably gendered aspect.”

Publicly Heralded – Publicly Forced Out
As Ms. Abramson experienced, women selected for top roles are often heralded in the media and often leave those roles just as publicly. In 2007, for example, Angela Braly was named President and CEO of Wellpoint, one of the nation’s largest health insurers. When her appointment was announced, outgoing CEO Larry Glasscock commented, “We are fortunate to have a leader of Angela’s caliber ready to assume the President and CEO position. Angela has been one of my most trusted and valued colleagues, partnering with me on literally every major strategic initiative undertaken by the company over the past two years. She brings the right combination of intellect, health policy knowledge, business experience, strategic vision and execution.” In 2010, Braly also took over as Chairman of Wellpoint after steering the company through the combined fallout of the financial crisis and the ratification of the Affordable Care Act (ACA). By 2011, Braly resigned under shareholder pressure driven by concerns over her management ability.

Aberration or Pattern?
Abramson and Braly are only two examples of women who have made it to the top role only to find them packing their bags a short time later. According to a study by Strategy& (formerly Booz & Company), women in the top job are forced out more frequently than their male counterparts. The study, now in its 14th year, looks at CEO turnover at the 2,500 largest public companies. The data show that in the over the past decade 38% of women chief executives were fired, compared with 27% of their male counterparts.

But that’s just the headline. Deeper into the study one finds that women chief executives often face additional hurdles during their tenure, which likely contribute to the higher dismissal rate.

Women CEOs are more likely to be outsiders
According to the study, 35% of women CEOs were outsiders versus 22% of men. The study doesn’t specifically address why women CEOs are more likely to be outside hires, but the data might suggest that women believe that they need to change companies to move to the CEO level and therefore are more open to outside opportunities. In the study, Gary L. Neilson, Senior Partner at Strategy& is quoted: “When boards look for new CEOs, they necessarily find a larger pool of female candidates outside their own organizations.” These hires may have full support from the Board of Directors, but they may face internal resistance from tenured executives who believe they were passed over for the top role. Neilson continued, “That women CEOs are more often outsiders may be an indication that companies have not been able to cultivate enough female executives in-house.”

Women CEOs are more often at the helm in turnaround situations.
Data in the study also indicate that on the whole, inside hires often produce higher shareholder returns during their tenure than outside hires. The study does not discuss the data by gender, but it is possible that women are getting these roles in part because the board has not found a male candidate willing to take on the challenge.

Whether women CEOs are viewed as bringing a fresh perspective to an organization or whether women CEOs merely find that the available opportunities are primarily in turnaround situations is not clear. However, an article in Leadership Quarterly suggests that women in the top corporate jobs tend to have personal experience in crisis management. Terrance Fitzsimmons of Australia’s University of Queensland conducted in-depth interviews with male and female chief executives to compare their backgrounds and career paths. “Nearly all of the female respondents experienced one of the following: a forced international move; the death or serious illness of parents, siblings, or close relatives; domestic violence or serious marital instability; or an estrangement from their parents before the age of sixteen,” notes Fitzsimmons.

A Permanent Problem or Part of the Journey?
The truth behind Abramson’s departure is likely complex. The story behind each CEO termination or resignation (however, it is characterized) is individual and complex. Gender, race, and other factors simply add to the complexity. The message to women is: embrace new opportunities but recognize that the opportunities and performance metrics may not yet be equal. But remember, even the most public failures include some successes as well.