CEO Succession: Where Are The Women?

Women, in the U.S. at least, are currently riding the crest of a historically significant change. “Outsiders” are slowly replacing “insiders” in leadership, visible positions. To wit, Harriet Tubman, African-American former slave, abolitionist and Civil War Union spy, will replace former slave owner Andrew Jackson on the face of the $20 bill. Other women such as Eleanor Roosevelt and Susan B. Anthony will be featured on the obverse sides of other bills. It’s being called the biggest change in U.S. currency since Martha Washington graced the $1 silver certificate more than a century ago.

This outsider trend is not confined to U.S. Dollars. The latest CEO Findingson Women CEOs in the 2015 CEO Success Study by PwC/Strategy& shows that in planned CEO successions in which outsiders were chosen, women were more often hired than men – 32% vs. 23% of the total between 2004-2015. (Access the full report here.)

Fewer Women CEOs

But despite this trend, the study of 2500 global publicly-listed companies showed that only 10 women were among the 359 incoming CEOs at the world’s largest companies last year – 2.8%, the lowest share since 2011.

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Overall, the study shows CEO turnover last year at a record high of 16.6%, compared to 14.3% in 2014. “Outsiders” accounted for more than a fifth of those CEOs hired in planned turnovers between 2012-2015 – nearly double the rate for the previous four-year period (2004-2007). However, the study also shows these outsider CEOs were more likely to be forced out than insiders, though the gap is narrowing: 21% of CEOs forced out between 2012-2015 were outsiders compared to 16% of insiders, while during  the period 2004-2011 the ratio was 32% to 21%, respectively.

Not surprisingly, industries in some distress — those whose financial results had been less than spectacular or whose business had been “disrupted” (i.e., financials, telecoms, utilities, healthcare, energy) – sought outsiders as CEOs. The study shows that outsider CEOs were more likely to have had international experience (28%) and be of a different nationality than the company’s headquarters’ makeup.