Why Women CEOs Are More Likely To Be Forced Out

Less likely to get a promotion, and more likely to be forced out or have a life event interrupt their careers, women represent only 3% of new CEOs in the U.S. Here's how we can change that.

"Corporate America is a man’s world," says Carly Fiorina. The former CEO of technology giant Hewlett-Packard was considered to be one of the most powerful women in business in 1999 when she became the first woman to head up a Fortune 20 company. Five and a half years later, after HP survived the collapse of the dotcom bubble but lost 40% of its stock value, Fiorina was forced out.

It’s been nearly a decade since her departure, but Fiorina, who currently serves as chairman of the product philanthropy organization Good360, says corporate America is still very much a man’s world: "There are more women CEOs today, which is not an insignificant thing, but progress has been amazingly slow," she says.

Women make up 46.9% of the labor force, according to the U.S. Bureau of Labor Statistics, but they made up just 3% of new CEOs in 2013, according to a study by the consulting firm Strategy& (formerly Booz & Company). In its 14th year, the annual study examines CEO turnover and incoming and outgoing CEOs at the world’s 2,500 largest public companies.

While there is a huge disparity in numbers, men and women CEOs have similar profiles; they rarely come from a region outside of where the company headquarters is, they're more likely to come from line (sales and manufacturing) rather than staff roles, they become CEO in their early 50s, and they have a tenure of about five years. But there are two areas where they’re different: Women CEOs are less likely to be promoted from within and more likely to be forced out.

The Inside Track

Companies like to promote familiar faces—an average of 76% of all CEOs come up through the ranks, the study finds—but it’s men who are more likely to be on that track. In fact, 78% of men who became CEOs between 2004 and 2013 were insiders, compared to just 65% of women CEOs. One reason for the difference may be that there aren’t enough female candidates, suggests DeAnne Aguirre, Strategy& senior partner.

"Companies need to rotate more women into line roles," she says. Line positions, such as sales and manufacturing, are considered to have a direct contribution to the company's profits. Staff positions support the line and include human resources (HR), billing, and public relations.

Aguirre and Fiorina agree that the career path of General Motors CEO Mary Barra is a good example of what it takes to become CEO. "Something happened that was critical for her career; she was taken out of HR and put into product development for the purpose of developing her executive skills," Fiorina says. "Without that move, she clearly wouldn’t have the experience to be CEO. Many women don’t make that critical move."

Instead, women often stay where they excel: "They can get in a particular professional area where they’re very good and people come to rely on them," Fiorina says. "Sometimes it’s difficult for women to say, ‘I’m going to move out.’"

When Fiorina came to HP, she says several women were in entry and middle management levels, but few if any were at the top of the chain. She made sure when the company was looking at executive placements that qualified women and minorities were in the candidate pool.

"Twenty years ago, there was an issue of having qualified candidates," she says. "This is not an issue anymore. By the time I left HP, half of my direct reports were women, but they were a perishable commodity. Within nine months of my departure, 70% had left. Women are tuned to the environment in which they operate. If the environment is unfriendly to women, they may leave."

Unplanned Exits

While fewer women are being promoted from within, more women are brought in as CEO from the outside. "Women are frequently hired when a company feels as though it’s in a difficult situation and needs a turnaround," Fiorina says. This can be part of the reason why a higher number of women than men—38% versus 27%—are forced out of their companies as opposed to leaving in a planned succession or merger.

"Women CEOs who were brought in from the outside would be less familiar to an organization and might be given less of a grace period than a CEO promoted from inside," says Aguirre. She adds that one of the industries with a higher number of female CEOs is technology, which has a higher level of forced turnovers.

Fiorina’s exit from HP involved "a fundamental disagreement in the boardroom about the role of board members. The dynamics in the boardroom were vastly different for me because I was a woman," says Fiorina, whose memoir Tough Choices, chronicles her rise and fall at HP. "The interaction between the members of a boys’ club and a woman is different than the interaction among the members of a boys’ club alone."

Women are perceived, scrutinized, and criticized differently, says Fiorina. "When man is in a job, he is presumed to be competent; a woman isn’t given that presumption," she says. "Huge expectations are placed on women. The operating environment is different, especially when things are not going well."

Had she been a man, Fiorina says she’s not sure she would have been forced out. "A board is more likely to promote someone who is like them, including their gender or race," she says. "They’re also more likely to be reluctant to force the exit of someone they’ve known and worked with for a long time. It’s easier to make that decision when the person is different."

The Future

But women are making progress, says Aguirre. "Today 60% of undergraduate students around the world are women and 30% of the top business school students are women," she says. "Along with changing social norms and the expectations of the millennials generation, we believe more women will take CEO offices."

The Strategy& study predicts that by 2040 as much as a third of incoming class of CEOs will be women, but Fiorina says she’s disappointed that it could take 25 years to get there: "It’s disappointing to think that just a third of women would be CEOs when women make up half of the population and are getting MBAs and higher degrees at the same or higher rate as men," she says.

She is, however, encouraged by one change that’s happened since she was CEO: "When I was at HP, people were still talking about my gender five or six years in," she says. "When Mary Barra was named CEO of General Motors, stories about her gender lasted a few days and now no one brings it up. That’s progress. We don’t help women CEOs by focusing on her gender; we should focus on her results."

[Image: Flickr user Philip Clifford]

Add New Comment


  • JP Collichio

    It is said in todays day and age that discrimination of any sort even exists. In 2,000 years of history we are still the bumbling Neanderthals that discovered, not invented, fire.

  • Melissa Sullivan

    I would like to lend an alternate perspective. Women are less likely to ask for help, often taking on too much. One of the key differences between men and women in leadership is the ability to sell ideas, form alliances, encourage ownership amongst the ranks and holding department leaders accountable. Sound familiar? Yes, we often do this at home too. It all comes down to resource allocation and gaining agreement amongst the ranks of what needs to get done, by who & when. It is my perception, of having met Carly and worked for HP during those years that THIS is one area where she fell short.

  • It doesn't sound as though much has changed since Carly Fiorina has left HP, despite there still being a woman CEO, Meg Whitman at the helm.

    There must be a fine line a woman executive must tread when she leans towards promoting women, rather than men, with possible criticism, despite the fact it is business as usual in the good ole boys club.

    There are many bad middle managers who are in place to protect their more senior leaders, often male. Yet, turnover is rarely examined. There should be a clue if a particular division has a higher turnover of women than men.

    Unfortunately, everyone is so busy protecting their own behinds, rarely do they want to examine such matters and brush it off as "normal". What it costs the organization in brain drain would quieten shareholder value if it were prevented.

    @optioneerJM Jeannette Marshall http://optioneerjm.blogspot.ca/

  • Melissa Sullivan

    That depends on the perspective. The decision to merge two super giants in the computer world was not her decision alone and the operational execution of merging was not easy to pull off. I worked for HP during those years, staying on for a total of 16 before leaving for better opportunities & advancement.

  • Sobigalpa Comic

    The thing is that Corporate world is still very much a ''macho" world sans the females. The "macho" fears that a female CEO will definitely "eat" up the corporate world, so why a female CEO? Of course, Yahoo appointed a female CEO --Melissa Mayer, 1 year back, but look at this CEO, how stupid and ignorant she is.She banned Yahoo from taking any Google mail in its search engine. Decisions like that will definitely cost females executives the top position. After all who thinks of taking a decision like that.I think only Melissa Mayer does.Thus females executives are definitely eating themselves. Females have only in the last 20 years have cracked into the top they have a long way to go. But overall i think male and female are biologically same or similar; two sides of one single coin.

  • Her gender is not the reason of her making bad decisions. DO NOT put all women in the same boat. This way of thinking is what STILL causes prejudices and stereotypes against women or different people in general. Quit focusing on gender or race but rather her decisions directly. Clearly this decision of hers was a stupid decision, would all other women on this earth had done the same? Not all, I am sure. Thus her gender not being the reason of a bad decision.

  • Don't make it about gender? Feminism is all about splitting the world into two separate camps based on gender and then telling the female one that it's the universe's eternal victims.

  • The article didn't show research showing when more than two women are on a board the business performs better and more ethically than when no women are on the board. Do more women cause the improvement, or do successful companies tend to be smarter and hire more women? Research is incomplete; still it doesn't matter. Michel A Bell

  • There's no doubt that this a huge issue in business but the problem with the article is that it's very difficult to see the picture clearly by only reading percentages - in other words, obfuscation by statistics. By only reporting basic descriptive stats, my sense is that you might actually be under-reporting the reality...