Equality At The Top – It's Time To Close The Gender Gap

Foreword     Chapter 1: Looking Beyond the CEO      Chapter 3: Factor 30 is Hotting Up

When it comes to gender parity, 2023 saw progress—but not enough of it. While last year saw the joint (with 2022) highest recorded proportion of women CEOs appointed to the world’s leading indices, this number was only 12%.

Of the people appointed to lead global companies, just 22 were women, as opposed to 156 men.

The Euronext 100 and ASX 200 indices saw the highest proportion of women CEOs appointed at 25% each, with the Hang Seng and FTSE 100 not far behind at 20% and 19% respectively. But the DAX 40, CAC 40, Nikkei 225, NIFTY 50 and STI did not see any women appointed CEO in 2023.

Global CEO appointments by gender from 2018 – 2023

Whichever way you look at it, we are a long way from true gender balance at the top. Indeed, our research shows public companies are 81 years from gender parity in CEO appointments.

Progress differs considerably between markets. The STI and CAC 40 are further ahead, currently 10 and 16.5 years away from gender parity at the top respectively. The S&P 500 is tracking below average at 59 years until parity, whereas the FTSE 100 is even further behind, at 117 years. More alarmingly, based on today’s numbers, some markets—the Hang Seng, Nikkei 225, and DAX 40—may never reach gender parity.

Years to gender parity of CEOs by Index as at 2023

In early 2024, we are living through an unprecedented degree of change at the top of businesses. It’s time to aim high and use this opportunity to rebalance the leadership, not reinforce old paradigms. Our research clearly demonstrates that women are just as effective across leadership metrics as men, even outpacing them when it comes to coaching and developing direct reports.” Laura Sanderson, UK lead and EMEA co-lead, RRA

Appointing more qualified women CEOs is not just the right thing to do, it also brings material benefits to businesses.

One way for women to show up more clearly on the succession radar is to acquire necessary board experience through non-executive director (NED) roles. Increasing, women board representation at NED level has a very beneficial accelerator effect on the pipeline of women CEOs, particularly if internal talent development processes have been lacking.

Laura Sanderson continues: “The good news is that we are standing at a critical time when we can accelerate progress. First, there are now more opportunities for women to get board experiences earlier in their executive careers. Second, the rise in the proportion of women nomination committee chairs and members will help mitigate any unconscious bias in the CEO appointment process. We must grasp this opportunity to move on from the belief that the CEOs of the future need to look, sound, and behave like those from the past.”

A level playing field for CEOs?

Following a number of high-profile women CEO departures in 2023, boards will also benefit from better understanding women’s reasons for leaving CEO roles. We found that women are more likely to retire for personal reasons, with 16% of women citing this factor versus 5% of men in 2023. Interestingly, we also found that women are more likely to be fired than men (34% versus 25%)

My view is that women CEOs are penalized more severely than men in the media for two things: underperformance (women CEOs get fired more quickly for this)—or for any perceived hubris or limelight seeking. Today’s CEOs are expected to be more of a public figure than ever before, and the relative scarcity of female CEOs automatically gives them a higher degree of prominence. If you’re a woman, you are under more pressure to visibly outperform, and woe betide you if you’re seen to be enjoying the profile of the CEO role too much." Laura Sanderson, UK lead and EMEA co-lead, RRA

RRA’s Marie-Osmonde Le Roy de Lanauze-Molines puts forward evidence of what she calls “the hesitancy gap”.

“It’s time to start taking the preparation of women for CEO roles far more seriously. Organizations still aren’t organized enough to prepare the internal candidate in a fair way—and they still lack a healthy pipeline of women CEO successors. Organizations need to invest more in their women leaders. Addressing this bias is a critical next step.”

Boardroom rules and practices can certainly help. As Laura Sanderson points out, the practice of appointing women as NEDs—aided by term limits—at top UK companies has allowed more women to gain the necessary board experience to be considered for CEO and helped put the FTSE 100 in the top half of indices on gender parity of appointments.

And Marie-Osmonde Le Roy de Lanauze-Molines adds that, in France (one of the top performers on gender parity), it’s normal practice for CEOs to be appointed for fixed terms of four years, creating more opportunities to appoint women to the top job.

We need to increase the size of the pool

Despite these glimmers of hope, O’Kelley is clear that we need fundamental structural change to CEO feeder roles if we’re going to shift the needle: “Just look at the number of women running P&Ls across the major index companies. While the proportion of women CEO appointments in 2023 is small, it makes sense given how few women act as CFO or run P&Ls— roles that are often tapped for CEO.

“The reality is that this isn’t going to change anytime soon. It’s a pipeline training question—until women have more P&L/CFO responsibilities, the numbers are going to be small. It’s going to be decades before we reach gender parity because we need to get people through pipelines. To fix this, we need stronger measures to ensure pipelines are gender balanced.”

Gender and CEO tenure: Evidence of the glass cliff?

Our research shows that men hold CEO roles longer than women. Globally, the average tenure for women CEOs in 2023 was 4.1 years, compared to 8.7 years for men.

In 2023, departing women CEOs in the FTSE 100 had been in their role for an average of 4.6 years, as opposed to 7 years for men. The S&P 500 saw a wide gap in average tenure by gender with departing women CEOs holding their roles for an average of 2.1 years, as opposed to 9.9 years for men.

Average women’s CEO tenure vs mens’ CEO tenure by index from 2018 – 2023

While it’s difficult to make any concrete claims from these figures, given how few CEO seats are held by women at the world’s top public companies, the numbers do add weight to the “glass cliff theory,” which contends that women are often appointed to senior roles at especially difficult moments for organizations and then subjected to particular scrutiny.

RRA’s Laura Sanderson believes that the glass cliff theory and ‘gendered’ thinking both contribute to the mismatched expectations which often lead to the removal of women CEOs: “We are not recognizing what good looks like in some women CEOs in the way that we should.”

Authors

• Stephen Langton leads Russell Reynolds Associates’ Board & CEO Advisory Partners in Asia Pacific. He is based in Sydney.
• Marie-Osmonde Le Roy de Lanauze-Molines is a senior member of Russell Reynolds Associates’ Culture capability. She is based in Paris.
• Luke Meynell co-leads Russell Reynolds Associates’ Board and CEO Advisory Partners. He is based in London.
• Rusty O’Kelley co-leads Russell Reynolds Associates’ Board and CEO Advisory Partners in the Americas. He is based in Miami.
• Laura Sanderson leads Russell Reynolds Associates’ operations in the UK and oversees the firm’s Board & CEO Advisory Partners team throughout Europe. She is based in London.