Being a CEO can be tough. There’s a lot of complex challenges that face a person when they’re running a company, and when things go wrong the buck stops with them. The important issues they have to deal with everyday include hiring the right talent, managing customer relationships, ensuring the company stays competitive and popular, and overcoming cyber security threats, all while ensuring that they keep a healthy work-life balance.
But female CEOs face even more challenges on top of those that their male counterparts have to deal with. There are only a very small number to begin with anyway, and while the Fortune 500 now sports a record 33 female CEOs, many of the biggest economic sectors – such as technology and financial services – remain dominated by men. But those who do manage to break through the glass ceiling to top these industries are under much more constant threat than male CEOs.
Yet, despite that, female CEOs are shown to have an extremely good record of success. In the S&P500, 13 of the index’s 24 female CEOs led their companies’ stocks to outperform the index in terms of total returns over their tenures, with some even producing triple- and even quadruple-digit percentage gains. The average yearly return for the S&P’s female-run companies was over 12% percent during 2018/19 financial year, compared to 11% for male-run companies.
So what are these extra challenges that female CEOs face in the workplace that male CEOs do not encounter, and how do they overcome them to experience success such as in the S&D stock index?
The glass cliff
The glass ceiling is a concept we’re all aware of – it is the idea that women’s progress to the top of industry is stunted by an invisible barrier that men do not encounter. But the glass cliff will likely be a new idea to you. The term describes a phenomenon whereby women in leadership positions – such as CEOs – are more likely to be drafted in to run a company during times of trouble, when the success of failure is at its greatest, and then are more likely to be removed from their post. In other words, women are selected to lead in tough times, being placed at the end of the cliff in a way male CEOs are unlikely to be, and then are more likely to be pushed off of it.
The numbers back this idea up. According to research, 63% of people believe that women should take over a company in crisis, while female CEOs are 45% more likely than men to be dismissed or fired. A separate study of the attitudes of US college students found that where a company with a history of being led by men is in crisis, 69% thought a woman should be hired to lead it, compared to 62% who thought the company should be continued to be led by a man in times of prosperity. The research found that this was not the case when it came to women led companies.
How can women CEOs beat the odds?
This all means that, sadly, women have more work to do as CEOs in order to hang on to their position and avoid being pushed off the end of the steep cliff that they have been shunted to the edge of. Simple things like having a strong network in the office and being firmly on top of all the statistics can make their position more secure, make it easier to avoid falling off the cliff, and appear more indispensable.
Defining what success will look like with the board before taking the job will also make a female CEO’s job easier, making it clear what they need to do to survive. Unfortunately, this all places even greater, and unfair, pressures on them in order to stay on the cliff and begin to move away from the edge and does nothing to encourage more women to enter these male dominated industries.