Female CEOs are still an unfortunately rare breed, and whilst their numbers are slowly increasing, a new study from Florida State University suggests that those that do break the glass ceiling tend to be paid less, have shorter tenures, and do worse in the stock market despite comparable financial performances to their male peers.

What’s more, the research found that women CEOs were less likely to serve as the chair of their board, and had a tougher job actually becoming the CEO in the first place.

“This research should be eye-opening to people, and I hope they take a closer look,” the authors say. “We hope this sets the record straight on past research, some of which has produced conflicting results, and now people can build on this aggregation of findings.”

Life at the top

The researchers attempted to dive deeply into what life was like for female CEOs, and especially what role their gender played in their careers.  They conducted a meta-analysis of some 158 previous studies that were conducted over a few decades to explore everything from companies’ hiring choices to the impact of gender on leadership.

“The situation for women leaders is probably worse than you think right now,” the researchers explain. “Many women who become CEOs are absolute rock stars. They have graduated from elite schools and risen through the corporate ranks faster, but they get paid less, are less likely to be a firm’s board chair, have shorter tenures in the job and are more likely to lead distressed firms. We wondered, ‘What’s going on here?'”

Thus began a two and a half year research project to understand why that was.  The result was a bunch of factors that were broadly grouped into two buckets: demand-side factors, which reduce the desire for CEOs to be women by limiting the willingness of companies to plump for a female boss, and supply-side factors, which often sees more women choosing to leave the workforce.

Social factors

In addition, there are also a number of sociological factors that influence who we want as CEO.  The authors say that men are socialized from a very early age to display the kind of traits we have come to associate with leadership, whether it’s being aggressive or pugnacious.  These are traits that are much less common among women.

“Females are more likely socialized to care for the home or be nurturing,” they explain. “Men start to develop characteristics that might help them become a CEO early in childhood, whereas fewer women do. That reduces the supply of female candidates for CEO jobs.”

Perhaps more disconcerting is the apparent bias in the stock market against companies with female CEOs.  The researchers used a number of accounting metrics to allow them to compare the share performance of companies with similar financial results.  The analysis revealed that the stock of companies run by women performed worse than those of companies run by men.

The authors suggest that this is largely because both investors and analysts are often men, and therefore they have less direct experience with female CEOs, whilst also being influenced by gender stereotypes and in-group favoritism.  Taken together, they believe this helps to explain the apparent discount stocks of companies led by women faced.

“Women have come a long way in the workforce in terms of their overall numbers and acceptance, but when it comes to stock market investors evaluating a CEO and a company that they don’t know, I think investors may subconsciously discount that firm because the leader is female versus male,” the researchers explain. “It seems when investors take an overall look at firms, biases creep in, and people may not even be aware of them.”

Reducing biases

Whilst this initial study focused primarily on identifying biases, they hope to focus future efforts on examining ways to reduce the biases that result from both demand-side and supply-side factors.  They believe that too many talented women are losing out as a result of these factors, and companies are losing out on potential leaders as a result.

They do however have a few tips for young leaders who wish to become CEOs in the future, including attempting to earn promotions early on in their career if possible, as the evidence suggests that the women who do become CEO often have fewer years of experience than their male counterparts.

“These women have earned their place at the top,” the researchers explain. “But the data shows things are different for women — the workforce does not offer a level playing field.

Whether these findings move the needle much remains to be seen, but in our supposed war for talent, it seems crazy for women to be discounted in the way they appear to be being.  Hopefully this research goes some way to addressing things.