More women CEOs, slowly but surely

Eva Jansen-Diener, PwC

For 14 years, global management consultancy firm Strategy& (former Booz & Company) has examined CEO turnover at the world’s largest 2,500 public companies. The focus of research has been on incoming and outgoing CEOs – rather than all CEOs – because determining what happens at critical decision points helps understand what companies are looking for in their CEO and how the role is changing.

The research shows that the proportion of women in the incoming class of CEOs has been larger than the proportion in the outgoing class, indicating that women CEOs are becoming more prevalent among the world’s top companies. Women CEOs are still rare — just 3% of new CEOs — but they are becoming more prevalent, and this trend is expected to accelerate.

The data indicates that by 2040 as much as one third of the incoming class of CEOs will be women, based on an ever higher education of women, continuing entry of women into the business workforce, and changing social norms of corporate leadership around the world.

Companies in the U.S. and Canada have had the highest %age of women CEOs over the last decade (3.2 %). In Western Europe the percentage of women CEOs is 1.4 % and the Japan has had the lowest share of female top executives (0.8 %).

Companies in the IT and consumer products industries have had the highest percentages of women CEOs (3.1 % and 2.6 %, respectively). The materials industry has had the lowest share of female CEOs (0.8 %).

In terms of professional background, women CEOs are different from their male peers in that they are more often outsiders — new CEOs hired from outside the company (35 % of women versus 22 % of men). Otherwise women CEOs have about the same professional backgrounds as their male peers.

That woman CEOs are more often outsiders may be an indication that companies have not been able to cultivate enough female executives in-house.

New CEOs were mostly familiar to their companies: 76% of last year’s new CEOs were insiders, and 26% had worked at only one company. 80% of incoming CEOs were from the same country as that in which company headquarters are located and 65% did not have experience working abroad. The median age of new CEOs was 53.

The fact that companies continue to select CEOs who are familiar faces, particularly when it comes to nationality and international experience, suggests that the ‘global CEO’ is more mythical than real.