First, the good news: There’s a sea change in the C-Suite. CEO departures are on the rise, and a record 31% of incoming CEOs are women. For the first time, women finally run more than 10% of Fortune 500 companies after being stuck in single digits for years. That’s not parity, but it’s progress.
Now the caveat: Of the nearly 300 CEOs who left their post within the first quarter of 2023, about one fourth cited retirement as their reason for exiting. Stepping in as a new CEO is challenging — especially so if you’re a woman following a long-tenured CEO, who is typically a White man.
A 2019 study from S&P Global Market Intelligence found that while women executives tend to turn greater profits than their male counterparts, they’re also held to higher standards. In other words, even women at the helm of companies are susceptible to bias — and their mere presence doesn’t automatically transform systems that perpetuate the status quo.
In order to counteract the inherent bias that women, and especially women who belong to other marginalized groups, face in the C-Suite, companies need to “operationalize their values into equitable structures” that support women leaders within the organization, explains DEI consultant Natania Malin Gazek.
“Having female representation is great. But all it solves is representation,” she says.
When newly-minted women CEOs inherit systems that aren’t set up for their success and they come into power at a particularly difficult point in a company’s history, they’re already heading toward the “glass cliff”— a phenomenon where women hired as turnaround CEOs have a shorter tenure and are 45% more likely to be fired from their role than men. Musk’s appointment of experienced executive Linda Yaccarino as his successor at Twitter is a recent, and egregious, example.
Additionally, a 2023 study in the Journal of Financial Stability found that a long-tenured CEO can actually harm their successor’s performance. The incoming CEO often ends up inheriting extensive “clean-ups” such as restructuring and dealing with asset write-offs, which delays actioning growth results.
Executive coach Dr. Sunne-Ryse Smith explains that when we celebrate the news of a woman being appointed CEO, we often don’t take into account that her success is contingent upon a two-pronged approach: clean-up and rebuilding. If there’s systemic bias in the workplace, then that’ll create an additional barrier that didn’t exist for the White male predecessor. In fact, an easy way to gauge whether a company is set up for gender and racial inclusivity is how they announce the hire of a woman CEO. One study by Penn State suggested that heightened celebration of making the diversity hire can showcase the company’s focus on symbolic and performative gestures while overlooking long-term, substantive investments that will set up the diverse CEO to actually succeed, ultimately resulting in a shorter tenure.
“When we ask women to come in, we’re thinking, ‘Oh, she’s just going to put things back in their place.’ The challenge is that those messes didn’t happen overnight, and that suggests the issues are embedded into the organization,” says Dr. Smith.
The bottom line? It’s one thing to make it to the top, but quite another to stay there.
Equitable Systems Bolster Women’s Success
Without change at the root of an organization, incoming women leaders are expected to lead just like their predecessors, who, as mostly White men, haven’t experienced the same challenges or been held to the same standards.
Before the new CEO takes charge, company leaders can get ready to align systems and policies with the new leader’s vision, which will naturally require a culture shift. “Make sure that the organization has someone on staff to operationalize the new culture through equitable structures. Work the new cultural values into the criteria for how the organization hires, how it looks at pay raises and promotions, how it's written into evaluations,” says Gazek.
The next step is to get granular and understand how these systems impact individual employees. For example, having the HR department gather data through an anonymous employee survey is one way to gain a deeper understanding of how marginalized groups within the organization are impacted by existing policies, explains Gazek. The next step — and this is key — is for the incoming CEO to take action based on the feedback.
That might mean providing greater flexibility or more robust caretaking benefits, calling out microaggressions, and acknowledging the company’s “silent leaders” or the innovators who produce great work, but have yet to be given the opportunity to lead, explains Dr. Smith. While it’s incumbent upon the CEO to make the changes, the organization has to actually give her the power and the support she needs to succeed.
As more women step into the C-Suite, employees will inevitably take a closer look at how DEI values are promoted and executed within an organization. To support the CEO’s reputation with the team, leaders on the board and in the C-Suite need to be “looking at their DEI values and then evaluating how well they can execute them,” explains Gazek.
It’s crucial to translate these values into actionable behaviors that can then be formalized in performance evaluations for both the CEO and her employees. The new CEO may risk falling into a trap of perpetuating existing oppression or be accused of simply “talking the talk,” says Gazek.
Keep in mind that change isn’t going to happen overnight. Dr. Smith emphasizes the important distinction between changing a company’s climate, which can be a quick fix, and its culture, which is embedded in an organization. Only when systems transform and support is entrenched within an organization can a woman at the top fully flourish.
“We tend to forget that we have an individual thumbprint,” says Dr. Smith. “Sometimes, we’re concerned that we won’t be perceived as professional or strategic or corporate, but what we bring to our leadership roles that no one else can is our natural talents and gifts. That’s something I want to emphasize to women.”
