Female CEOs face the glass cliff as research highlights shorter tenure than men
Last updated on 16 November 2023
With an increasing number of women occupying leadership roles in Australia, there are positive signs that gender equity is strengthening. This is especially beneficial for industries such as aged care where over 80% of the workforce is female.
But there are still signs that women are not receiving a fair-go, and are potentially set up to fail, as new research has found that female CEOs are not lasting as long as their male counterparts. This phenomenon is called a gender tenure gap.
- In Australia, almost one-quarter of CEOs are female and the aged care sector is batting above average with a near 50-50 split (51% of aged care CEOs are female)
- Global research from executive search and leadership advisory firm Russell Reynolds reveals that since 2018, female C-level executives have lasted an average of 5.2 years compared to 8.1 years for men
- Looking at publicly listed companies analysed by Russell Reynolds, at no point since 2018 has the percentage of incoming female CEOs been greater than 15% for any yearly quarter
By analysing over 1800 companies listed on the 12 top stock exchanges across the globe, including Australia’s ASX 200, Russell Reynolds honed in on the prevalence of the gender tenure gap. Their Global CEO Turnover Index found that record CEO turnover and growing numbers of female CEOs are still too slow to reach gender parity.
Australia does buck the trend, at times. Between 2019 (quarter four) and 2021 (quarter two), all new CEOs in listed companies were males, but overall one-quarter of new CEOs appointed since 2018 are women.
Factors such as gender bias, discrimination, workplace support and culture are all contributing factors. Meanwhile, Laura Sanderson, the UK head of Russell Reynolds, told The Guardian that long-tenured CEOs may also be inflating statistics – although that doesn’t change the low number of women being appointed to executive roles.
“While the sample size is too small to be significant, we also need to consider whether the data may support the glass cliff theory,” Ms Sanderson added.
The glass ceiling has been replaced by a cliff
The glass cliff is not new, with researchers first digging into the trends over 15 years ago. Essentially, they found that women are often appointed to precarious leadership positions, including as board members when portfolios perform badly or after a previous CEO departs due to controversy or criticism.
While these appointments are often seen as a positive step towards change, there is a recurring theme of women being handed difficult projects with limited backing.
“If women are more likely to take on leadership roles in times of crisis, then it follows that their time is office is likely to be stressful, more heavily scrutinised and shorter in tenure,” Professor Michelle Ryan, director of the Global Institute for Women’s Leadership at the Australian National University in Canberra, told the Observer.
“This reduced tenure could be for a number of reasons – because there is often higher turnover in times of crisis, because they are judged as not performing well, even though poor performance was in train before their appointment, or because when things start to turn around, men come back into leadership roles.”
Russell Reynolds’ analysis also suggested that women may leave C-level positions on their own terms in search of better positions and opportunities, including Chair and Board roles.
With the prevalence of glass cliffs, and lower-level leadership barriers such as a lack of diversity and recruiter bias, companies need to maintain open pathways to leadership. One option that is proven to be successful is succession planning.
- Internally appointed CEOs have a longer tenure, averaging almost two years longer in the role than their external counterparts
- In 2023 (quarter three), 85% of new CEOs were internal appointments, an increase of 10% from the previous quarter
- First-time CEOs also last longer in the top job, averaging 2.2 years more than experienced CEOs in a new role
- Newly-appointed women CEOs are 5% more likely to be first-timers than their male counterparts
By recognising the impact that women and first-time hires can have, long-term succession planning can become an important part of your organisation’s success. Gender diversity in leadership roles is rewarding across the board as research shows there’s enhanced financial performance, increased innovation and stronger workforce relationships. But regardless of who is on the radar to replace an existing CEO or board member, it’s essential to support them and commit to their growth.