Why are female CEOs falling off the 'glass cliff' ?

Carol Bartz was appointed chief executive of Yahoo in 2009 and was soon fired over the phone.

When Carol Bartz became chief executive of Yahoo in 2009, her appointment was seen less as evidence of a corporate breakthrough for women than as another trend: the "glass cliff."

The phenomenon, coined by researchers, describes how women are recruited disproportionately into tough jobs in which the title is big but the odds of success are small.

And Yahoo was certainly that: The company was struggling to grow and diversify, its stock price was suffering, and within the past year it had navigated a failed acquisition offer from Microsoft and an attempt by investor Carl Icahn to replace its board. At the time, Yahoo's chairman called Bartz "the exact combination of seasoned technology executive and savvy leader that the board was looking for."

Then, like a comparatively high ratio of female CEOs, Bartz was fired. (Over the phone, many will recall.)

Strategy&, the consulting firm formerly known as Booz & Co., released its 14th annual Chief Executive Study this week, which found that women are more often forced out of CEO jobs than men. The study showed that over the past decade, 38 per cent of female chief executives who left their positions were sent packing, compared with 27 per cent of male CEOs.

Gary Neilson, one of the study's co-authors and a senior partner at the firm, said the findings show something new about the glass cliff. "We don't think it's so much that they're put into challenging roles than that they're more often outsiders," he said.

The report found that female CEOs are comparatively more likely to hail from outside the company than their male peers. Thirty-five per cent of female chief executives between 2004 and 2013 were outsiders, compared with just 22 per cent of men. (The study looked at incoming and outgoing CEOs over 10 years for the world's 2,500 largest public companies, resulting in a sample of more than 100 women.)

Being CEO as an outsider "is a tougher job," Neilson said. "They don't have as many connections in the company to understand how things work, and their performance is not as high" as those who have been groomed in-house. Research has shown, for instance, that external CEOs are 6.7 times more likely to be dismissed with a short tenure than homegrown ones.

GM's Mary Barra rose through the ranks to become the company's CEO. Photo / AP

While there are examples of notable female CEOs who rose through the ranks - GM's Mary Barra, IBM's Virginia Rometty and PepsiCo's Indra Nooyi - Neilson said that many companies lack female senior executives just beneath the CEO level who are ready to take on the job.

"Maybe this is the chicken-or-the-egg thing," he said, "but more women CEOs are outsiders because companies can't find them inside their own companies, or they may find them but they're not ready. So they go pick them off another company."

The study forecasts that things will probably improve over time. In eight of the past 10 years, the share of women becoming CEOs has been higher than those leaving the position, the report found. Although women comprised only 3.6 per cent of new CEOs in 2013, the authors predict that as many as a third of incoming CEOs will be women by 2040.

A greater focus on helping such candidates could accelerate that trend, Neilson said. "You can only steal so many other people" from other institutions, he said. "Companies need to move down a more aggressive path [on internally developing] women who may be quite capable leaders."

- Washington Post