In light of the #MeToo movement, a firm that tracks CEO replacements has tailored its report this year to illustrate the persistent gender gap.
Challenger, Gray & Christmas, a global outplacement firm based in Chicago, released a report Jan. 18 showing the rate of women taking over as CEO of U.S.-based companies in 2017 remained at about 18 percent, the same as the prior year.
Of the 993 replacement CEOs recorded in 2017, 183 — or 18.4 percent — were women. That is down slightly from 2016, when women represented 193, or 18.5 percent, of the 1,043 replacement CEOs announced by U.S.-based companies.
Andrew Challenger, vice president of Challenger Gray, said his firm had been tracking CEO replacements throughout 2017, but following the #MeToo movement starting in October, decided to frame the data in terms of the gender gap.
“It’s something we started doing more in response to changes in the culture,” he said. “We just wanted to look at it a little bit more closely. The #MeToo movement is on the front of everybody’s minds and, certainly, the minds of women in the C-suite of companies in the U.S.
“As companies grapple with issues and potential policy changes stemming from the onslaught of sexual misconduct allegations in the workplace, they would be wise to ensure women have seats at the table,” he said.
The firm used news articles, SEC filings and press releases to compile the report. The companies are from various industries, of varying sizes, including publicly traded, privately held and nonprofit entities nationwide.
In Michigan, 20 CEO replacements were recorded in 2017; three of the successors were women:
Karen Cheeseman, Mackinac Straits Health System, St. Ignace, replacing Rodney Nelson
Martha Fuerstenau, American 1 Credit Union, Jackson, replacing David Puckett
Nancy Spencer, Alcona Health Centers, Alpena, replacing Christine Baumgardner
In West Michigan, six CEO replacements were recorded, and none of their successors were female:
Jim Gill, Gerald R. Ford International Airport, Grand Rapids, replacing Brian Ryks
Marc Bitzer, Whirlpool Corp., Benton Harbor, replacing Jeff Fettig
Stephen Paul, Grand Transformers, Grand Haven, replacing Steve Parker
David Dodd, Medizone International, Kalamazoo, replacing Edwin Marshall
Steven Cahillane, Kellogg Co., Battle Creek, replacing John Bryant
Chris Palusky, Bethany Christian Services, Grand Rapids, replacing Bill Blacquiere
Nationwide, women are making strides in some industries more than others.
According to U.S. Bureau of Labor Statistics data cited in the Challenger report, 74.2 percent of human resources managers are women, while 72.3 percent of health care managers are women. Public relations, fundraising and social work occupations each have more than 70 percent women managers.
Half of incoming U.S. CEOs in the legal industry were women last year. The next highest percentage of women in new CEO roles came in the government/nonprofit sector, as 42.3 percent of new CEOs were women. Women made up 33 percent of new CEOs in education entities and 28.6 percent in construction companies.
Women are increasingly creating their own leadership opportunities through entrepreneurship. In 2017, women owned more than 11 million businesses employing an additional 8.9 million people, according to a report by American Express. That is 41 percent more than the 7.8 million women-owned businesses reported by the U.S. Census Bureau in 2007.
But Challenger said the industries that have been male-dominated still are male-dominated.
Of the U.S. companies that announced CEO replacements in 2017, no women took over the CEO role in the automotive, chemical, commodities or telecommunications industries.
Meanwhile, the latest data from the BLS indicated women still trail men in management occupations. As of December 2016, there were 6.8 million women in these jobs, compared to 10.6 million men.
“For women … not seeing a woman in top leadership or seeing how incredibly difficult it is for them to achieve that role when you see only a fraction of top CEOs is women, I think that can be really discouraging,” Challenger said.
Getting women into the management pipeline is hindered by outdated and often dangerous company cultures, he said.
“We’re consistently finding out there are more companies that have this old, ‘locker room/boys’ club’ mentality of not having safe environments for women,” Challenger said. “I think we’d see less of that if there were more women at the top.”
The inequity has more than just a morale-killing effect.
“The lack of gender diversity at many companies, especially in leadership roles, is a huge detriment,” Challenger said. “Studies have shown that more women in leadership positions correlate to higher profits and better stock performance.”
Countries around the world are wising up to gender disparity in boardrooms and C-suites with methods the U.S. has not employed.
“There hasn’t been any activity on this in the U.S., but in many countries around the world, there are new laws that mandate the number of women that should be on boards in public companies,” Challenger said.
In 2017, the European Union instituted a quota requiring 40 percent of a company’s nonexecutive directors to be female.
Spain adopted similar measure in 2007. Belgium, France, Italy and the Netherlands did so in 2011, with Germany following in 2016.
According to a February 2017 Fortune report, women make up about 20 percent of corporate board directors in the U.S.
On the executive side in the U.S., of all Fortune 500 companies, only 26 are currently led by women.
Challenger said his firm plans to continue reporting on this issue in future years.
“It’s a big issue, women in leadership,” he said.