New study reveals why so few women make it to top executive positions26 May 2012
UQ Business School Postdoctoral Fellow, Dr Terrance Fitzsimmons
Although women represent over half of Australia’s graduates, they account for only eight per cent of executive jobs and only three per cent of CEOs in the top 200 listed companies. In 2010 there were only 46 female CEOs of ASX listed companies.
Now an in-depth study by UQ Business School has cast new light on the reasons why there are so few women in top jobs. The research by Dr Terrance Fitzsimmons challenges the common beliefs that prejudice at board level is largely to blame, or that an unavailability of part time or flexible roles prevents women from climbing the career ladder into executive or CEO roles.
Dr Fitzsimmons, currently a Postdoctoral Fellow at UQ Business School, interviewed over 120 leaders across corporate Australia. Interviews with 30 specialist CEO recruiters and 30 ASX200 chairpersons were conducted to examine the appointment process and to find out what companies looked for in a new CEO. Additionally, the study examined ASIC and ASX pronouncements over the past decade to see how these influenced boards in their CEO selection decisions. He also interviewed 31 female and 30 male CEOs of large Australian companies matched by industry and market capital to examine their childhoods and how their career path had led them to become CEOs.
The research revealed the significant pressures on companies from their shareholders and others to select a candidate with an extensive and successful track record within their industry, if not as a CEO then in a senior line role. He discovered that many factors acted against women acquiring these essential pre-requisites and these form the key barrier to them securing the top job.
Dr Fitzsimmons says: “While recruiters reported that many boards asked for women to be present on short lists of candidates, boards were quick to eliminate them for their lack of breadth and depth of industry experience.”
However, compared to males, women currently are much less likely to occupy line role positions that provide them with this breadth and depth of experience in industry. According to the recruiters in the study, firms tend not to place women into line roles and often women did not apply for these positions either. Where women were in line roles and chose to have children, the line role often conflicted with their domestic situation resulting in the need to transfer to more flexible roles.
The report also found that women tended to be less confident than men at interview, even when they had achieved just as much, and had greater difficulty selling themselves to boards.
The research showed a major contrast between the childhood experiences of male and female CEOs. Almost all the males had professionally employed fathers and ‘stay at home’ mothers and all but two had captained football teams. They had learned leadership and other skills broadly applicable to work life prior to entering the workforce.
Meanwhile the females tended to have self-employed fathers and mothers who helped in the business and often came from disrupted backgrounds, with family traumas such as death or family breakdown forcing them to take on an adult role at an early age.
There was also a difference in career paths, with females having more roles and spanning multiple industries. While the vast majority of male CEOs were ‘industry appointments’, in general, female CEOs were ‘context appointments’. They tended to have a depth of experience in one or two business contexts such as finance or law and these skills usually accounted for their appointment.
Dr Fitzsimmons said: “These findings challenge the notion that solutions to gender inequity in leadership positions should be focused solely upon changing the business environment. They suggest that far greater attention needs to be placed upon how we socialise and educate our children, as well as the support and experiences we give to people entering their careers.”
Dr Fitzsimmons says companies need to ensure that talented individuals are identified very early in their career. They need to be mentored and encouraged to gain line role experience and succession planning needs to reach far deeper into organisations.
He warns that while family friendly roles have been critical in allowing women to enter and remain in the workforce, there are many issues that require more attention. “The corporate field will not accept substitutes for breadth and depth of industry experience. Women who wish to progress to CEO roles need to be able to occupy a line role and should try to avoid part time roles if possible, since these are not valued on a CV and are widely viewed as negative.” A key feature of the women who had made it to CEO was that they had options available to them around after-hours child care and an equitable sharing of domestic duties with their respective spouses. Given that traditionally women have born a disproportionate burden for child care, the study clearly points to the need for government and business to co-operate much more to extend child care hours to match the hours often required by managers and executives”.
Dean of UQ Business School, Andrew Griffiths said: “The lack of women in top management roles represents a shocking waste of female talent. I believe this is the largest research project to date covering this area. This research project constitutes an original and important contribution to our knowledge.”