Why There Are So Few Women CEOs

Summary

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WSJ Your Money Briefing

Episode Summary: Why There Are So Few Women CEOs

Date: February 7, 2020
Host: J.R. Whalen
Guest: Vanessa Fuhrmans, Wall Street Journal Reporter

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Overview

This episode delves into the persistent gender gap in top corporate leadership roles, focusing particularly on why so few women become CEOs of major U.S. companies. Reporter Vanessa Fuhrmans shares findings from Wall Street Journal analyses and other research, highlighting structural barriers, differing career paths, and efforts by some companies to foster women's advancement to leadership.

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Key Discussion Points & Insights

The Current Landscape for Female CEOs

• Underrepresentation at the Top ([00:20])

  • Less than 6% of S&P 500 companies are led by women.
  • While the number of female CEOs has doubled in a decade, improvement is slow and sometimes stagnant.
  • Quote:

    “When you look at the entire S&P 500, you have at the moment 29 women leading companies. That’s just about 5%.”
    — Vanessa Fuhrmans [01:32]

• Turnover Offsets Gains ([01:47])

  • In the past two years, six women were appointed CEOs, while seven stepped down or were ousted, resulting in no net gain.

The C-Suite Gender Divide

• Roles with Power vs. Support ([02:17])

  • Many women reach executive roles but not the ones that are clear stepping stones to becoming CEO.
  • Men more often hold profit and loss (P&L) roles, while women are disproportionately in support positions like Chief Marketing Officer, Chief HR Officer, or General Counsel.
  • Quote:

    “Men are predominantly in the roles that are these operational roles, these mission critical roles that do lead to the CEO spot. Women, on the other hand, are overwhelmingly in roles that are considered as support roles.”
    — Vanessa Fuhrmans [00:36]

• Analysis of the Russell 3000 ([03:01])

  • WSJ reviewed the top 3,000 U.S. companies, finding a pronounced gender gap in “operational” (P&L) versus support roles.

Company Strategies That Are Working

• Hershey’s Strategic Talent Pipeline ([03:59])

  • Former CEO J.P. Bilbrey implemented systematic planning to promote women into high-impact roles.
  • Current CEO Michelle Buck is a direct result of this focused pipeline; she continues mapping careers for men and women in top 70 company roles, emphasizing broad operational experience.

• Chevron’s Broadened Leadership Metrics ([04:57])

  • Chevron hired an outside consultant to redefine leadership assessment, including qualities such as consensus-building, not just assertiveness.
  • Result: Top women scored higher than expected when broader qualities were valued.

Barriers Beyond the Glass Ceiling

• Information and Sponsorship Gap ([05:48])

  • Research indicates women are less frequently encouraged to seek pivotal P&L roles or receive advice on career mapping due to weaker networks and less sponsorship.
  • Quote:

    “Men, because of their networks… were getting this information and acting upon it. Whereas women, more often than not were left in the dark as to how to map out their career to the next move…”
    — Vanessa Fuhrmans [05:48]

• Risks of Moving to Non-P&L Roles ([06:48])

  • High-level women are wary of leaving operational roles for support positions, fearing boards will “forget” their core leadership experience.
  • Quote:

    “If boards are forgetful, they’ll forget that I had this big role. I’m not sure I want to make that move.”
    — Ellen Coleman (via Fuhrmans), former CEO of DuPont and CEO of Carbon [07:10]

• Glass Ceiling or Glass Walls? ([07:55])

  • The issue is often “glass or invisible walls”—barriers along the journey, not just at the top.
  • Men and women build their careers differently, often starting early.

The Role of Corporate Culture

• Culture Shapes Ambition ([08:21])
  • Boston Consulting Group found that in organizations with visible diversity at the top, women's ambition equaled that of men.
  • Where diversity wasn’t visible, women’s aspirations lagged.

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Notable Quotes & Moments

• “Over the last two years we had six women who were appointed to CEO positions in the S&P 500...at the same time, we had seven women step down or be ousted from their jobs. So really we took a step back in that two year period.”
  — Vanessa Fuhrmans [01:47]
• “Not too many women to begin with.”
  — Vanessa Fuhrmans on Chevron’s oil & gas leadership ranks [05:38]
• “I think the apt metaphor is really a glass or invisible wall...it’s that men and women are building their careers and being encouraged to build their careers in many cases differently than men, often very early on.”
  — Vanessa Fuhrmans [07:55]
• “At companies where there was a corporate culture that fostered diversity...the women’s ambition levels were equally as high as the men’s.”
  — Vanessa Fuhrmans [08:21]

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Important Timestamps

• [00:20] - Introduction and stats on women CEOs
• [01:32] - Current number of women CEOs in S&P 500
• [03:01] - WSJ’s analysis of executive roles in the Russell 3000
• [03:59] - Hershey’s strategic pipeline
• [04:57] - Chevron’s leadership assessment innovation
• [05:48] - Information gap in advising women for pivotal roles
• [06:48] - High-level women’s career move decisions
• [07:55] - Explanation of “glass wall” metaphor
• [08:21] - Impact of corporate culture on women’s ambition

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Summary Flow

This episode explores why the number of female CEOs remains so low despite women earning most U.S. college degrees and comprising half the workforce. Key barriers exist not at the finish line but at critical junctures: women are less likely to land in or be encouraged toward operational, high-visibility roles that feed the CEO pipeline. Organizational examples and research show that systematic talent planning (Hershey) and redefining leadership criteria (Chevron) can improve women’s odds of reaching the top. Yet, differences in sponsorship, risk-taking in career paths, and non-inclusive cultures persist, reinforcing the notion that invisible “glass walls” guide men and women down divergent executive ladders well before any glass ceiling comes into play.

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Transcript

[A]

Deal replaces fragmented payroll vendors with one global system. No third parties. Hire, manage and pay teams in 150 countries. Operate like a local everywhere. Visit d e l.com WSJ.

[B]

Here's your Money briefing. I'm J.R. whalen at the Wall Street Journal in New York. Less than 6% of the nation's top companies are led by a woman. And while the number of female CEOs has doubled in the past decade, the figures aren't expected to improve much more anytime soon.

[C]

Men are predominantly in the roles that are these operational roles, these mission critical roles that do lead to the CEO spot. Women, on the other hand, are overwhelmingly in roles that are considered as support roles. These are important roles, but they're like the chief marketing officer, the chief HR officer, the general counsel.

[B]

That's Wall Street Journal reporter Vanessa Fuhrmans. She'll explain what's keeping women out of those pivotal executive ju that often act as stepping stones to the top and what some companies are doing to change that. That's next. Women earn most of the college degrees in the US and make up half the workforce. But relatively few hold top corporate jobs. So what's holding women back? Wall Street Journal reporter Vanessa Firmans is here with us to explain. So Vanessa, what are the current numbers in the S&P 500 with regard to female CEOs?

[C]

Well, they don't look that great. When you look at the entire s and P500, you have at the moment 29 women leading companies. That's just about 5%.

[B]

And those numbers really haven't improved.

[C]

Well, if you just take a look at last year, you can see why it is taking so long. I mean, last year, well, actually over the last two years we had six women who were appointed to CEO positions in the S&P 500, which might look like some reasonable progress. But at the same time, we had seven women step down or be ousted from their jobs. So really we took a step back in that two year period.

[B]

But women do hold executive positions at these companies, right?

[C]

They do. And companies have made progress in elevating women to the C suite and to the senior level positions. The issue is many of those women, you could even argue most of those women are not moving up into the positions that really matter, the ones with power.

[B]

And those are known as profit and loss or P and L. Right.

[C]

They are essentially the roles that involve somebody running a business, a business unit, a brand, a department, something like that. Anything that has responsibility for generating a profit and being responsible for all the parts of the business within that division.

[B]

And that was the topic of a Wall Street Journal analysis of the largest 3,000 companies in the U.S. yes, we

[C]

really wanted to take a step back, look at what is happening on the broader corporate landscape. So we collected the data on the country's 3,000 biggest publicly traded companies by market value and that's essentially the Russell 3000 index. And we looked at the top executives at each of those companies and what roles they were in and what gender they were. And what you saw, and what you continue to see is that men are predominantly in the roles that are these operational roles, these mission critical roles that do lead to the CEO spot. Women on the other hand, are overwhelmingly in roles that are considered as support roles. These are important roles, but they're like the chief marketing officer, the chief HR officer, the general counsel. They're all very important roles, but they aren't the stepping stones to the CEO job.

[B]

And some companies are making inroads. Hershey, for example, has done a lot to move women along the path to top executive roles.

[C]

In a word, you could say it's because of strategic talent planning. Under the previous CEO, a man, J.P. bilbrey, the company really started much more systematically building a female pipeline to the C suite. And their current CEO, Michelle Buck, who is the first woman to run that company, is you could say, a product of that effort. And she continues that tradition today. She and her executive team meet several times a year. They discuss the 70 or so top roles of the company and they look at the men and women who make up those roles and the people right below them. And then they look at how they would map out those careers of those people. What is the experience? Those people need to broaden their experience to prepare them for the next role and be successes in those roles.

[B]

And then on another occasion, Chevron hired an outside consultant to help them find the next crop of executives. And they got some very interesting, yes,

[C]

they had been doing their own leadership assessments inside the company, if you will, for a long time. And then they hired a third party that took a slightly different, broader look at what's a leader. And as you can imagine, the metrics included things beyond being someone who's take charge or assertive or makes decisions from the gut. It included also consensus building, team leading, other metrics like that. And what they saw was the women at the top of their organization scored much higher than they had previously.

[B]

And this is the oil and gas field, which is a male dominated field.

[C]

Right. So not too many women to begin with.

[B]

Also, something very significant I read is that women were not as likely to be encouraged to seek pivotal executive roles as men were.

[C]

Yes. This has come up in some of the research that has been done around this conundrum. The why? Why aren't women getting into these roles? And the Working Mother Research instit earlier this year actually conducted a pretty comprehensive study surveying men and women across a number of different companies. And what they found was it was as simple as not getting that information. Men, because of their networks, because of perhaps the sponsors that they might more readily have role models that they might more readily have available to them, were getting this information and were acting upon it, essentially. Whereas women, more often than not were left in the dark as to sort of how to map out their career to the next move, certainly if they wanted to consider a leadership track.

[B]

Now, how about women who might hold the P and L jobs? Who would be promoted to a position that's outside the path to the CEO position but is still a very high level position?

[C]

Yes. Well, some of the very senior women that I spoke to said they were very leery of making that kind of move once they did have that experience. I spoke to Ellen Coleman, who's the former CEO of. She now is the CEO of Carbon, it's a 3D printing startup. But she talked about her time at Dupont when she already had a big P and L role. And her boss at the time said, you know, it'd be really great for you to round out your resume and take on a support role because this would demonstrate to the board how you can wield influence with other leaders at the company. And she was very reticent. She said, if boards are forgetful, they'll forget that I had this big role. I'm not sure I want to make that move. And ultimately she kept her P and L role and added additional responsibilities to it and then continued on to bigger operational roles.

[B]

So she saw the potential challenges down the road.

[C]

She did. She saw that as a potential pitfall.

[B]

So this sounds like it's less of a glass ceiling at work and more the result of some barriers in place along the way.

[C]

Yes, I think the apt metaphor is really a glass or invisible wal so much that men and women are progressing in their careers equally and then the women are suddenly hitting a glass ceiling at the very top. It's that men and women are building their careers and being encouraged to build their careers in many cases differently than men, often very early on.

[B]

Does corporate culture play a big role in setting a path for women?

[C]

It certainly does. You see, Boston Consulting Group did a really insightful study a few years ago where they saw that at companies where there was a corporate culture that fost diversity and where employees felt like there were more women, more people of ethnic minorities at the top, the women's ambition levels were equally as high as the men's. But at companies where that wasn't the case, there was a much bigger differential.

[B]

All right. That's Wall Street Journal reporter Vanessa Fuhrman's with us. Vanessa, thanks for coming on the show.

[C]

Thank you.

[B]

And that's your money briefing. I'm JR Whalen in New York for the Wall Street Journal.

[A]

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