For women CEOs, danger lurks atop the corporate ladder

In one recent 24-hour span, two women were pushed out of leadership roles at major US corporations, spotlighting how investor pressure can frustrate efforts to broaden diversity in the boardroom. Ellen Kullman, Meg Whitman, Mary Barra, Indra Nooyi, Marissa Mayer, Irene Rosenfeld, Sheri McCoy and Ursula Burns all have led large, publicly-traded companies. And Burns was the first black woman to serve as CEO of a major company. These women led DuPont, HP, General Motors, PepsiCo, Yahoo!, Xerox, Mondelez and Avon Products, but they also all have been at the crosshairs of influential Wall Street investors who succeeded in pushing Kullman, Burns, Rosenfeld and McCoy to the exit.

To save their jobs, others gave in to the critics: Whitman agreed to split HP in two, while Barra agreed to dividend payments for GM shareholders.

Do male CEOs really outperform their female counterparts or are the women simply easy targets for investors trying to throw their weight around in search of bigger returns?

That question has taken on greater importance at a time when Silicon Valley tech companies face accusations of sexism.

Of the 500 corporations included in S&P’s Wall Street stock index, just 27 firms, or 5.4 per cent, are led by women.

“Above and beyond all other factors we might use to explain why these firms are being targeted, we found very large and significant gender effect,” said Christine Shropshire, a professor of management at Arizona State University. “Investors perceive these women CEOs to be weaker, to be less confident, less competent, less able.”

In an interview with The New York Times, former DuPont chief Kullman said the workplace becomes less fair for women as they reach the highest rungs of the corporate ladder.

A 2013 study by PwC found women had a 38 per cent chance of leaving the CEO position within 10 years compared with only 27 per cent for men. But in most cases the performances turned in by women CEOs surpassed the industry average.

Shares in women-led businesses have produced 25 per cent annual returns since 2009 compared with only 11 per cent for the MSCI World index of large and mid-cap companies, according to a study of 11,000 companies in 27 developed countries.

Activist investor Nelson Peltz has faced criticism after campaigning to remove Nooyi, Kullman and Rosenfeld through his investment firm Trian Partners. Trian rejects the idea that gender played any role in the firm’s actions.