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Pipeline trickle: Number of female CEOs in biggest US companies will continue to lag, mainly because half have had no woman in top ranks

November 1, 2006

For more information, contact: Benjamin Haimowitz,

An ambitious research effort, launched six years ago to shed new light on why there were so few women CEOs in major companies, has yielded a startling discovery: nearly half the thousand largest US firms had no woman in their official listings of principal executives.

The finding, reported in the new issue of the journal Academy of Management Perspectives, goes a long way to explain why the number of female CEOs in corporate America has risen at a snail's pace lately -- and why it will almost surely continue to lag in the decade to come.

The AMP study uniquely draws on what the authors believe to be "the most comprehensive set of information" on some 10,000 high-ranking executives. In a mammoth undertaking, they analyzed layer by layer the entire upper-executive pipeline of the thousand largest US companies in order to gauge how many women would rise to the top. And that number, the study concludes, will almost surely continue to be discouragingly low.

Comments Constance E. Helfat, a professor at Dartmouth's Tuck School of Business, who carried out the study with Dawn Harris of Loyola University Chicago and Tuck colleague Paul J. Wolfson,  "Even if the upper pipeline has a lot more women today than it did when we launched this research in 2000 -- and I know of no data that indicates it has -- an improvement so recent is highly unlikely to have much effect on the number of female CEOs for at least another decade."

Beyond revealing a complete absence of women higher-ups in 48% of the largest US firms, the study found them to be no more than a token presence in many others. Of 942 companies analyzed (mergers, acquisitions, bankruptcies, or private ownership reduced the sample from an even thousand), only 7.2% had more than two women in the top ranks, and a mere 2.6% had more than three. Although "the number of women executives per firm appears to increase modestly as the number of executives per firm increases," the study notes, "the percentage of women executives decreases... suggest[ing] the possibility of tokenism."

Their findings, the authors believe, should impart new urgency to longstanding concerns about the lack of women CEOs in the corporate world.

On the basis of the number of women CFOs and the number of other female executives with high-level line positions (that is, with direct profit-and-loss responsibility), the authors estimate that the proportion of female CEOs will increase from the current level of about 1.7% to about 4.9% in 2010 and 6.2% in 2016.

"Even though 6.2% is more than triple the current percentage," comments Helfat, "it doesn't seem very impressive when one considers that by 2016 it will have been about 40 years since women entered corporate management in force."

Moreover, the above estimates are based on the assumption that executives move up one rank every five years on average, which, the study's authors suspect, is "perhaps optimistic." If executives turn out to have a longer tenure at each level of the hierarchy, it will correspondingly reduce the number of female CEOs in future years. For example, if the average tenure at each level turns out to be eight years, the percentage of female chiefs in 2016 will be only 4.9%.

In contrast, estimates are higher if they are based solely on executives' rank in the corporate hierarchy -- in other words, without taking into account whether or not they occupy line positions, where women are underrepresented. In the past, however, the route to the top has usually been via line positions.

The study's findings derive from a massive data-gathering endeavor that entailed coding biographical information for each individual whom companies in the Fortune 1000 listed in their corporate proxy statements or official reports to the Securities and Exchange Commission in the year 2000. In restricting themselves to executives listed in official filings and reports, the researchers "prevent[ed] potential over-reporting by firms of the number of women executives" and thereby were able to uncover the previously unnoted fact that half the companies had no high-level female executives at all.

The final database for the study consisted of 9,950 individuals (9,129 men and 821 women), each of whom was assigned to one of seven top corporate levels -- level one being CEO or board chairman; level two being second-in-command, often called president or COO; and levels three, four, five, etc., each being a further step down in the hierarchy. The seven female CEOs in the sample represented 0.63% of the total executives at level one. Women constituted 1.65% of the executives at level two, 6.40% of those at level three, 10.43% of those at level four, and 12.80% of those at level five.

Also analyzed were salient factors affecting individuals' advancement through corporate ranks, including whether executives held line or staff positions, what functions they performed, how old they were, and how long they had been with the company and had held their current job. Analyses also incorporated data on such firm-level factors as size, industry, and profitability.

The principal factor influencing the number of female executives in a company, the researchers report, was its industry, with the results seeming predictable in some cases but not in others. Among the former group was trucking, where women constituted only 3.8% of high-ranking executives, and soaps and cosmetics, where the figure was 13.1%. Among the surprises: computer software (13.4%) and transportation equipment (15.7%) were among the top 10 industries in percentages of high-ranking women executives, while furniture (4.2%) was among the bottom 10.

There were also some surprises in women's executive functions. Says Prof. Harris, "Our results do support the widespread impression that women are underrepresented in line and finance positions, but, contrary to popular belief, they are overrepresented in accounting and legal affairs and hold their own in strategy and information technology."

While the results offer little prospect of an upsurge of female CEOs in the next decade, they do reveal some promising trends. As the study puts it, "In companies with women executives, the women were younger, had less company tenure, and less tenure in their current positions than the men. These factors suggest that many companies were aggressively hiring and promoting women into the top executive ranks. Moreover, although women clustered lower down in the executive hierarchy than men, two thirds of the women executives held positions in the two levels just below the second-in-command. Once women are in the executive hierarchy, they do well in terms of rank."

In sum, the report concludes, "Getting more qualified women into the executive hierarchy is critical... Our findings suggest that companies achieved greater representation of women in the top executive ranks through aggressive promotion and hiring, policies that companies lacking women executives could emulate. Moreover, even companies that had women executives could benefit from additional efforts of this sort, in light of our findings suggestive of tokenism."

The study, entitled "The Pipeline to the Top: Women and Men in the Top Executive Ranks of US Corporations," is in the November issue of Academy of Management Perspectives, a peer-reviewed quarterly journal. With about 17,000 members in 92 countries, the Academy of Management is the largest organization in the world devoted to management research and teaching. The academy's other publications are the Academy of Management Journal, Academy of Management Review, and Academy of Management Learning and Education.

Media Coverage:
Bloomberg Press Service. Number of U.S. Female Executives Will Lag for Years, Study Says. (Friday, November 10, 2006).
Bloomberg Radio. Wall St. Countdown: Interview with Paul Wolfson. (Friday, November 10, 2006).
Business Week. Up Front: Corner Office Crawl. (Monday, December 04, 2006).
Chicago Tribune. Crimp in pipeline for women execs. (Monday, February 05, 2007).
Financial Times. Women Still Struggling to the Summit. (Friday, November 10, 2006).
The New York Times. Letters: Women as CEOs. (Sunday, December 24, 2006).
U.S. News & World Report. The Unbreakable Glass Ceiling. (Monday, November 20, 2006).
United Press International. Study: Glass ceiling to remain unshattered. (Friday, November 10, 2006).
USA Today. Moneyline: Number of female top execs to increase. (Friday, November 10, 2006).
USA Today. Women-led firms lift stock standing. (Wednesday, December 27, 2006).

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