Why do few women make it to the top job?

Nancy McKinstry, CEO of Wolters Kluwer, a Dutch publishing and information company, recalled holding a strategy meeting in which the press in Holland wrote that she wore a suit that was the same colour as the KLM flight attendants. As she told the New York Times recently, "Here we were talking about the plans for the business and that's what they focused on."

In spite of progress in the past decade, women still face tougher odds getting to – and staying in – the C-suite.

When we studied the leadership of 2,000 of the world's top performing companies, we found only 29 (1.5 per cent) of those CEOs were women, an even smaller percentage than on the Fortune 500 Global list (2.6 per cent). So it should not come as a surprise that only one woman, Meg Whitman, former CEO of eBay, made it to the top 100 of our rankings.

One notable difference between the men and women CEOs on our list suggests that women still aren't treated as equals to men when it comes to high stakes positions: Women CEOs were nearly twice as likely as men to have been appointed to the job from outside the company – even though our analysis clearly shows that inside-CEO candidates perform better over time, presumably because long-term growth depends on deep industry and firm-specific knowledge. Do top women have to go outside to move up? Our results suggest women are less likely to emerge as winners in their own companies' internal CEO tournament.

Remarkably, this paltry showing by females actually represents some progress. A decade ago only three women headed large public companies in the US; today 15 make the Fortune 500 list. With many of today's female chief executives of public companies appointed only in the last few years, women have had little time to build their legacies. Of our list of 29, 19 of the women were appointed on or after 2002. A common explanation for so few women reaching the top is the "glass cliff" theory, whereby women are more likely than men to be appointed to top jobs in poorly performing companies.

This was not true in our data: women were no more likely than men to be named CEO in times of tumbling share prices. Moreover, the best performers in our study, male and female, were precisely those who took over troubled firms. Witness Kate Swann, who achieved an impressive turnaround of WH Smith by focusing the troubled bookseller on airport and railway stores.

Another explanation is that women senior executives are still more likely to be concentrated in consumer goods and media, industries that have been open to women managers longer than, say, technology and science-based firms. Apart from Whitman, no other woman CEOs on our list came in on the ground floor of a high-tech, bio-tech or internet company – companies that tend to be smaller than their industrial counterparts, and therefore have more upside potential.

Even those women who do make it to the top spot – from an outsider status – face additional market and media scrutiny.

A study by Darden professor Erica James, reported in Strategic Management Journal found that stock in a company drops after the announcement of a female CEO, but not after that of a male CEO, and that this effect was stronger for outsider CEO women. James also found that journalists reference gender more when writing about newly-appointed women executives than when writing about men.

Visibility for women leaders is problematic in a way it's not for men, as McKinstry's "KLM suit" episode illustrates. Visibility can help a CEO get focus on his or her leadership, but when male CEOs talk strategy, it's fair to say no one's thinking instead about what he's wearing. (Insead Knowledge)

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