About the Success of Women at the Top

What are the standards on which women are appointed to become CFOs or CEOs, do they change business results and how are they perceived as leaders? New research provides insight – and guidance.

The S&P Global Market Intelligence Quantamental Research team has published one of the most comprehensive examinations, by breadth and time horizon, of gender diversity, to date. It provides new indications about the criteria that are applied in the appointment of female and male CFOs and CEOs respectively. Based on big data analysis, it has also identified areas where companies that had appointed female CFOs or CEOs subsequently outperformed previous results or the benchmark. Data comes from 5,247 male and 578 female new executive appointments at 6.000 companies over 17 years.

Common attributes drive male and female success – but women are held to higher standards than men

Instead of trying to analyse the male and female talent pools from which these appointments were made (and hence quantify probable inequality), the male-to-female appointment ratios of 16:1 for CEOs and 6.7:1 for CFOs prompted the researchers to look at the profiles of the appointed executives. A natural language processing (NLP) analysis compared achievements, education and personal traits associated with success (words like productivity, technology, or leadership) in the biographies of the newly appointed executives. It revealed that the average female executive has characteristics in common with the most successful male executives while they had much less in common with less successful male executives appointed to the C-suite. According to the report, the ‘profound correlation’ tells that

  • The commonly held belief in ‘token’ female executives is refuted
  • Instead, women executives are held to higher standards than their male peers
  • This higher standard may well be one driver of superior results achieved by females (below)
  • Common attributes drive success among males and females, alike.

The report concludes that the male talent pool appears to be ‘relatively overfished’ and that discrepancies (including the fact that less qualified men than women are currently appointed) should disappear when both pools will be equally tapped into. This confirms what D&I experts keep saying: diverse talent pools are under-utilised – even bearing in mind that their distribution does not mirror societal reality in all areas.

Different gender effects for new CEO and CFO appointments

Unlike other, more static analyses, the new S&P study examined financial KPIs in the 24 months following the appointments. In this period (compared to the time prior to their appointment)

  • Female CEOs saw a 20% increase in stock price momentum and
  • Female CFOs saw a 6% increase in profitability and 8% larger stock returns.

These results are economically and statistically significant. The report also shows that

  • Firms with female CEOs and CFOs produced superior stock price performance compared to the market average and
  • Firms with greater gender diversity on their board of directors had a higher gross profit relative to their asset base by 1.7% (compared to firms with low board diversity)

Firms in the study were separated into high and low board gender diversity, at each date cross section. High diversity boards were comprised of 19% females whereas low diversity boards were comprised of less than 4% females. The report, however, did not focus on representational issues but rather on qualification standards of C-level appointments and subsequent, mid-term financial performance.

In the light of this – additional – business rationale for diversity, the question reappears why companies do not naturally utilise the resources that were and continue to be available. While ‘bias’ seems to be the answer to almost every such question, another study finds a different focus.

Negative reactions to criticism from female bosses

In an experiment, 2,700 workers were hired online to transcribe receipts. Virtual (fictitious) managers had randomly assigned male or female names and provided performance feedback partway through the job. After completion, an evaluation captured different aspects of job satisfaction. The result was that both women and men reacted more negatively to criticism when it came from a female boss. Criticism from a woman led to a larger reduction in job satisfaction than from a man. The ‘employees’ were also twice as disinterested in continue to work for the firm when they had been criticised by a female boss. While most findings were similar across gender, men demonstrated a tendency to dismiss the validity of criticism coming from a female boss (‘less accurate’). The perception of female workers did not vary by the gender of their manager.

The researchers see implications of this on the success of women in management. “If using feedback is more likely to backfire for women in positions of power, they may adopt less effective management strategies or become altogether less interested in holding leadership positions”, the author, Martin Abel of Middlehurst University, writes. He also checked if women in upper management were ignored, but workers actually spent slightly more time reading and thinking about feedback from female managers. Neither did the experiment find a correlation of existing implicit gender biases with more negative reactions to criticism from women. Finally, the reaction was the same for people who previously had female supervisors that were positively perceived.

How D&I has to react to the recurring theme: role expectancies

What connects the cases of (not) appointing female executives and negative reactions to criticism from a female boss are role expectancies. The role of a manager, and probably more so of a C-suite executive, is expected to be more naturally performed by a man. This includes the ‘tough’ side of providing feedback just as much as being on top of numbers or – the ultimate leadership task – to manager other executives. A series of studies using the Schein Descriptive Index has continued to confirm the Think-Manager-Think-Male paradigm across cultures, levels and three decades. Other research has shown that people associate giving praise with female managers and giving criticism with male managers.

To that end, there seem to be elements of both exposure and implicit bias involved in the dynamics around gender and other diversity in management. For D&I, this includes, among others, some clear implications

  • Understand the different forms of bias, where they apply and how they can be mitigated
  • Avoid activities and communication that (re)confirms role expectancies, for example
  • Do not bring up flexible working in relation to wanting more women in management
  • Do not give different reasons for promotion or other rewards of outstanding men or women
  • Do not praise the different strengths that women bring to your leadership culture

Did you recognise some of the tendencies of your own D&I work? In this case, we are likely to be an interesting sparring partner for you.




Do Workers Discriminate against Female Bosses? By Martin Abel, September 2019