Local study shows female CEOs a distinct minority

Michael Holmes is a Jim Moran Associate Professor of Strategic Management at Florida State University.
Photo submitted by Kallen Lunt.

Beyoncé proclaimed that women run the world in her 2011 award-winning song, featuring the famous line “Who runs the world? Girls!” – a mantra that was chanted worldwide by fans and feminists. In 1996, James Brown proclaimed that it is indeed “a man’s world” in his historic single.

A recent study from Florida State University seeks to find the real answer to the question: Who runs the companies of the world?

The study revealed that there is an extreme underrepresentation of female CEOs. Only 5.4 percent of Fortune 500 companies had female CEOs in 2017 and this percentage is a record high in the U.S.

According to the study, compared to male CEOs, female CEOs had more human capital yet led less prestigious firms. Likewise, female CEOs received less favorable personal career success outcomes, and their firms had worse market-based performance.

“A lot of women CEOs are rock stars,” said Michael Holmes, FSU’s Jim Moran Associate Professor of Strategic Management. “They typically graduate from elite schools, work extremely hard and rise through the corporate ranks faster.”

So, why are women underrepresented? Holmes and his team spent two and a half years researching to find out.

Their meta-analysis synthesizes the findings from other studies to create fresh data that asks: How and under what conditions do female and male CEOs’ careers differ?

“We found that the problem is characteristics associated with leaders are associated with males,” Holmes said. “Traits like decisiveness, aggressiveness, and assertion are generally associated with males. So, females who demonstrate these same characteristics might be penalized for it socially and confirm to gender stereotypes.”

As a result of gender-role stereotypes, the demand for female leaders decreases. On the other side of demand is supply.

The study identifies supply-side forces as “factors that shape the career interests, goals, expectations, choices, and experiences of female and male CEOs differently.”

“Women tend to take on most family duties, particularly childcare,” Holmes said. “As a result, they take extended maternity leave, that men don’t take, or even opt out of the workforce. This is something that is much more likely for women than men.”

Susan Fiorito, director of FSU’s Jim Moran School of Entrepreneurship, agrees.

“We (women) are handling both business and family responsibilities. Men can focus primarily on their career, while women who have their own business and families, and are doing much more,” Fiorito said. “Women find huge satisfaction in being their own boss, starting a company, and managing a family – money isn’t our top priority.”

Another supply-side force aside from family demands is socialization.

According to the study, even as children, females are socialized to value others’ feelings, relational intimacy, and nurturing, whereas males receive more encouragement to assume leadership roles.

“Men are generally forced to do things that prepare them to be leaders in ways that women aren’t. For example, sports. Sports encourages cooperation and leadership skills,” Holmes said.

FSU’s Jim Moran School of Entrepreneurship is the nation’s first stand-alone entrepreneurship school at a public university.  Fiorito, its director, says the school will help improve the facts found in the study and empower women.

“Our program is very attractive to women that want to be awarded for the hard work they do, which isn’t always the case when working for someone else,” Fiorito said.  

Students with a focus in commercial and social entrepreneurship are tasked with creating their own businesses before graduating from the school.

Although the question of who runs the world may always be up for debate in the music industry, in the business industry women are still working toward equality.

To help, the study suggests firms identify exceptionally talented and driven women CEO candidates and craft career paths aimed at retaining and developing them.