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Women CEOs unfairly targeted

NEW YORK In one recent 24-hour span, two women were pushed out of leadership roles at major US corporations, spotlighting how investor pressure can frustrate efforts to broaden diversity in the boardroom.

Mrs Ellen Kullman, Ms Meg Whitman, Mrs Mary Barra, Ms Indra Nooyi, Ms Marissa Mayer, Ms Irene Rosenfeld, Ms Sheri McCoy and Ms Ursula Burns have all led large, publicly traded companies. And Ms Burns was the first black woman to serve as chief executive officer (CEO) of a major company.

They led DuPont, Hewlett-Packard (HP), General Motors (GM), PepsiCo, Yahoo, Xerox, Mondelez and Avon Products, but they also have all been in the crosshairs of influential Wall Street investors and activists who succeeded in pushing Mrs Kullman, Ms Burns, Ms Rosenfeld and Ms McCoy to the exit.

To save their jobs, others gave in to the critics: Ms Whitman agreed to split HP in two, while Mrs Barra agreed to dividend payments for GM shareholders.

Do male CEOs really outperform their female counterparts or are the women simply easy targets for investors trying to throw their weight around in search of bigger returns?

That question has taken on greater importance at a time when Silicon Valley tech companies face accusations of sexism and are under pressure to increase their racial and gender diversity.

Of the 500 corporations included in S&P's Wall Street stock index, just 27 firms, or 5.4 per cent, are led by women.

"Above and beyond all other factors we might use to explain why these firms are being targeted, we found very large and significant gender effect," said Ms Christine Shropshire, a professor of management at Arizona State University.

She studied the demands that so-called activist investors made of corporate leadership between 2003 and 2013.

Among companies with similar financial results, those that had put a woman in charge faced a disproportionate share of investor pressure, she told AFP.

"Investors perceive these women CEOs to be weaker, to be less confident, less competent, less able. And then they target their activism accordingly," she added.

In an interview with The New York Times, former DuPont chief Kullman said the workplace becomes less fair for women as they reach the highest rungs of the corporate ladder.

A 2013 study by PwC found that women had a 38 per cent chance of leaving the CEO position within 10 years, compared to only 27 per cent for men.

But in most cases, the performances turned in by women CEOs surpassed the industry average. Shares in women-led businesses have produced 25 per cent annual returns since 2009, compared to only 11 per cent for the MSCI World index of large and mid-cap companies, according to a study of 11,000 companies in 27 developed countries that was produced this month by Nordea Bank AB.

Mr Dan Zacchei, managing director at Sloane & Company, which advises activists and companies, said investors should take care to avoid creating an impression that women CEOs are being "targeted disproportionately". - AFP

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