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Cover Story
 
WOMEN CEO'S
As Shatter-Proof as Ever!
Women have broken a lot of Gender Barriers in Society, But The Glass ceiling is not Exactly in that List Yet
Issue Date - 17/03/2011
 
When a movement gathers pace, it can change an existing status quo that is years, even centuries old, and unleash a new paradigm. By that yardstick, the women’s liberation movement was started in the US in 1964 in the US and spread across the world. Obviously, a lot has changed since then when it comes to acceptability of women in corporations and in various positions, but when you look at upward mobility for women in the corporate world, you will be surprised at how little has changed.

At the outset, women CEOs head only 15 companies out of the Fortune 500, which is a representation of just 3%. A look at the results of a survey by US non-profit organisation Catalyst for 2010 provides deeper insights. Only 15.7% of board seats in Fortune 500 companies were occupied by women as compared to 15.2% in 2009. Only in their share of nominating/governance committee chairs do women beat that figure with 16.9% share, as compared to 16.8% in 2008. The board chair, on the other hand was occupied by a woman in 2.6% of Fortune 500 companies in 2010 as compared to 2% in 2009.

In India, the situation actually happens to be significantly better. A survey by EMA Partners International in 2010 covered 240 large corporations in India, and found that 11% of them had women CEOs. There were other differences. For instance, in India, 54% of women CEOs were in the BFSI sector, followed by media and life sciences at 11% each and FMCG and consulting at 8% each. In the US, FMCG and consumer durables accounted for 48% share of women CEOs and financial services accounted for 7%. But in terms of directors, India is worse off, since only 5% of seats for women directors in the BSE 100 are occupied by women, as per a report by Standard Chartered.

 
By all yardsticks, these aren’t indicators of a shattering glass ceiling for women. Simultaneously, there is definitely a wealth of academic research being done on issues of relative competitiveness, opportunities available, leadership styles, et al. Justin Wolfen of Wharton made one such study of S&P 1500 firms from 1992 to 2004, and concluded that there was no significant difference in returns to holding stock between female led and male led firms. A report by Lee and James in 2004 concluded that hiring a female CEO leads to negative abnormal stock return of 3.7% as compared to a negative 0.5% for a male CEO during the announcement window. A B&E 2007 study concluded that some 50% of the women CEOs under study eroded shareholder’s wealth. In addition, a huge 75% of companies led by woman CEOs underperformed the Sensex. On the other hand, a report by Catalyst cites that companies with higher representation of women on management teams provide 34% better average shareholder return than those with low representation.

A 2004 research by Michelle Ryan and S. Alexander Haslam of the University of Exeter pointed to the possibility of an even more dangerous trend after women CEOs shattered the glass ceiling – that of a glass cliff. Their research concluded that women appointed to leadership were more often put in situations where the chances of failure were high. Evidences cited in subsequent reports are are CEOs like Carly Fiorina of Hewlett Packard, Patricia Russo of Lucent and Alcatel-Lucent, Kate Swann of WHSMITH, Lynn Elsenhans of Sunoco and Carol Bartz at Yahoo!. But then, there are also surveys that concluded later on that this could not be generalised. There are a number of celebrated women leaders in US as well as India like Irene Rosefield of Kraft Foods, Indra Nooyi of PepsiCo, Chanda Kochhar of ICICI and Shikha Sharma of Axis; who defy the assumption that women CEOs necessarily underperform.

Or does the verdict even lie in statistics? Poonam Barua, noted economist and Founder Chairman of the Forum for Women in Leadership (WILL), comments to B&E, “There is no clear data that women CEOs get better business performance – simply because there are not enough women CEOs over time to make this static trend available. However, it is clear that having a woman CEO does not lead the company to financial disaster like Lehman Brothers, AGI, Chysler, or RBS.” Diversity in the work place at all levels is certainly a valuable end for the corporate world, and all possible efforts need to be done to provide equal opportunity to reach the top.

Through interactions undertaken with some select Indian and American CEOs and entrepreneurs, we give you exceptional insights on how they are leading their companies into the next growth orbit and the challenges they face in this special issue of B&E. Are they indeed getting the better of all the ‘glass’ on the way? Well, that judgement cannot be made in a haste.

          

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