From a article in the WSJ;
Over the past year, 307 companies in the Russell 3000 Index appointed new CEOs, according to Equilar. Only 26 of those were women—and 17 female CEOs stepped down or were ousted during that time.
We are supposed to believe that the absence of female CEOs indicates the business discriminates against women, or at least is unfair to them. I doubt that this is the case.
1. I have an alternative hypothesis, which is that the CEO job in a large company requires that, among other talents, facility with working with abstract systems. Feel free to re-read my essay on how corporations are managed.
the corporate CEO, operating with a limited information set that arrives indirectly, must use more abstract thinking. We may think of the CEO as trying to navigate in a confusing forest using only little scraps of a map. The CEO operates with a theory of the business and fits those little map scraps into the theory.
This sort of thinking is sometimes called “systemizing.” You find it more often in men than in women. Women tend to be better at empathizing, which is more helpful in small businesses or in functions like human resources. Of course, this does not mean that any given man is better suited to being a CEO than any given woman. But perhaps, just as in chess, you can have unequal gender outcomes at the top that are not the result of discrimination.
2. If women do face discrimination, then there ought to be a profit opportunity in selecting women to be CEOs. Just as the first baseball teams willing to break the color barrier were more successful than the laggards, so companies that shatter the glass ceiling should have an advantage.
I don’t know what the data say about comparative CEO performance. But the fact that almost as many women exited CEO jobs as entered CEO jobs suggests to me that corporations that hire women as CEOs don’t get an automatic windfall.
My mind has changed on this topic since reading the first part of Charles Murray’s book “Human Diversity” covering gender differences. The male “extreme-brain” explains the gender skew in the top world ranked chess players but the female “balanced-brain” is the new insight Murray has highlighted and it has great predictive power.
Steve Balmer’s “Monkey Boy Dance” was not the signature of a great systemizer, it was the signature of a CEO mistakenly applying techniques used to rally the mostly male troops at a yearly corporate sales kickoff. Many “great CEOs” come from the sales ranks. Larry Ellison is a systemizer that knows how to wear a suit. Suit and golf game CEOs don’t have to be good systemizers to be successful.
I think work-life balance is the core factor that explains female career choices in recent affluent cultures. If the CEO role entailed a healthy work-life balance, I suspect that a high IQ woman with a “balanced-brain” would be an ideal candidate.
“ corporations that hire women as CEOs don’t get an automatic windfall.”
see IBM
Ginny at IBM is a great talker. But something like 18 quarters of reduced revenue from the prior quarter.
This is NOT mentioned in the IBM note about her:
https://www.ibm.com/ibm/ginni/
I think she foolishly allowed many older workers to be pushed out / offered early retirement or other packages (I accepted one). Tho this allowed headcount to hire more young ones.
She has NO children — I’m pretty sure the fertility rate of female CEOs is less than 2.1. Love your kids, or love your work – pick one. (Or, maybe a third choice, love your husband – pick two). I think very few unmarried women are CEOs.
If the CEO role entailed a healthy work-life balance, … I’m sure, like a good artist loving his/ her work (“finishing the hat” – Sunday in the Park, with George), a balanced life does NOT go with unbalanced work competition to beat out those others willing to be unbalanced in order to win a top spot.
Top performers are usually very dedicated. Why so few great rock guitar players are female? Not unbalanced enough.
Ginny’s leaving in April:
https://www.sfgate.com/business/technology/article/IBM-CEO-Ginni-Rometty-to-retire-15017881.php
There would also probably be more CEOs, and more women, if there had been fewer mergers. A lot more $200 – 800 million revenue companies, and fewer over $10 billion. Probably also less top 0.1% income and inequality, tho also quite likely less total factor productivity.
But by record of antique times I find,
That women wont in warres to beare most sway,
And to all great exploits them selues inclind:
Of which they still the girlond bore away,
Till enuious Men fearing their rules decay,
Gan coyne straight laws to curb their liberty…
-Edmund Spenser
Can I propose an alternative hypothesis as to why there are so few women CEOs. Biology dictates that they have a greater investment in their children than males because of pregnancy, lactation and general requirements of motherhood. Women are the ones out of the workforce for periods of time because of this unlike the fathers. The fathers are investing in their employed jobs and the mothers are investing in the future of their children. Males therefore are likely to acquire more of the job skills required than women.
To make matters worse for women, the grandmother hypothesis that women even after menopause are more willing to invest their time and effort in looking after their grandchildren by helping their children. Human females and a few whale species are the only mammals that undergo menopause and continue living after their breeding days are over. All other female mammals continue breeding until they die.
It is not necessarily due to discrimination or is a negative that females prefer to invest their time and effort in looking after their descendants. There is a cost to them in not being in the job market as the males but there is also a benefit, not necessarily financial, but definitely genetically in enhancing the possibility of future descendants.