Listen to a synopsis of this research, read by Daniela Brandazza, Senior Director and Analytical Manager, S&P Global Ratings, President of WINS (Women’s Initiative for Networking and Success) at S&P Global
Women Lead Differently, How Different?
Daniela Brandazza, Senior Director and Analytical Manager, S&P Global Ratings, President of WINS (Women’s Initiative for Networking and Success) at S&P Global
This article revisits our 2021 study about the leadership differences between women and men CEOs during COVID-19, “Leadership in Turbulent Times: Women CEOs During COVID-19″. At that time, we concluded that women CEOs exhibited a leadership style that differed from the style of their male peers but that was just as effective in terms of the financial performance of their companies. Women CEOs showed a more positive communication style at the peak of the pandemic, with empathy being their most salient trait followed by adaptability, accountability, and diversity. The paper also shed light on the limited number of women CEOs across markets and sectors.
This new paper offers insights about how the communication style of CEOs has developed from the outbreak of the pandemic to 2022. Our research confirms that women CEOs have been consistent in exhibiting a more positive communication style since the peak of the pandemic to first-quarter 2022, based on sentiment analyses of earnings call transcripts of 6,831 CEOs of 5,801 companies of the S&P Global Broad Market Index covering corporations with the largest global market capitalization. We note a shift in the top three most favored styles used by women CEOs, to ones categorized as diversity, empathy, and adaptability. Ranking fourth was the transformation style based on the words they used to communicate, though at the onset of the pandemic it ranked No. 7 of 11. Men CEOs focused more on words related to transaction as well as growth and performance.
Women CEOs remain unsurprisingly underrepresented, accounting for only 5.4% of all CEOs globally. Norway has the highest percentage, with 13.4%. Doing much better is the participation of women on corporate boards, at on average 24% across industries. Even under unprecedented circumstances, women corporate leaders made some inroads over the past year. A total of 132 companies hired women CEOs in 2022 since 2020, mainly in the Financials, Industrials, and Health Care sector, representing over 60% of the total.
Using advanced techniques in natural language processing, our research aims to shed light on communication styles that women CEOs used during the early and later pandemic periods. What’s more, we find a link with the literature on emerging leadership styles that could help companies attract talent and prosper in the years ahead. So far, our latest data indicate that the type of positive communication style favored often by women CEOs seems more aligned with the concept of authentic leadership that draws from and mirrors the diversity of society.
The Emerging Theory Of Authentic Leadership And Its Link With Women CEOs
Dr. Gabriel Morin, Associate Professor of Leadership Development for the LARGEPA Research Laboratory in Management Sciences at Paris 2 Pantheon-Assas University
This research paper brings new insight into the research on women leadership thanks to its unique global data sample, focus on women CEOs, and the use of natural language processing and sentiment analysis to assess communication and leadership style.
Echoing one of the main findings of the 2022 update to this study, our literature review stresses the importance of diversity for women leaders, compared with their male counterparts (see the appendix, especially Chin, 2014; Van Knippenberg & Schippers, 2007; Fine, 2007; Chin et al., 2007; Wood, 2001; Mason, 1995).
Because of their gender, women CEOs are seen as important fuel in the drive for diversity (Chin, 2014; Van Knippenberg & Schippers, 2007; Fine, 2007; Chin et al., 2007; Wood, 2001; Mason, 1995). However, theories and research about leadership have not paid great attention to diversity (Eagly & Chin, 2010). Yet, the literature points to the need for diversity that crosses society and organizations today (Mor Barak, 2017) and the evidence of its contribution to organization efficiency and transformation (Rock et al., 2016; McKinsey, 2015; Credit Suisse, 2012; Horwitz & Horwitz, 2007; Bassett-Jones, 2005).
The leadership that women CEOs exemplify in this report falls into the category of authentic leadership. It is a more inclusive style that promotes team diversity (Chin, 2014; Eagly & Chin, 2010; Chin et al., 2007). That said, some characteristics of women’s leadership can enhance the typical ways men lead (Chin, 2014) by making them more comprehensive and sustainable. Women’s leadership style tends to benefit a broader range of stakeholders within and outside companies (customers, suppliers, and community).
The future of leadership lies in embracing better leadership theories (Day, 2014). And authentic leadership is among the emerging leadership theories from the new paradigm (Morin, 2016; Avolio et al., 2009; Luthans & Avolio, 2003). Authentic leadership can be defined as “a pattern of transparent and ethical leader behavior that encourages openness in sharing information needed to make decisions while accepting followers’ inputs” (Avolio et al., 2009, p. 423). This theory seems to be the most supportive of diversity leadership and in particular of leadership by women by mobilizing the notion of leader identity (Avolio et al., 2004). As the field of leadership continues to evolve, it embraces a broader range of leadership models beyond those centered on the study of more traditional male models, which may not necessarily prove to be authentic for women.
This new study confirms, with one more year of data, that the communication characteristics of women CEOs points to a different leadership style than one practiced by their male counterparts.
Our Key Findings Regarding Leadership Style Based On Sentiment Analysis
Clayton Davis, Senior Data Scientist, S&P Global Ratings
In this study as in the previous one, women CEOs continue to communicate consistently in a more positive manner.
Comparing early pandemic to late pandemic periods, women CEOs used proportionately more expressions of joy and men used proportionately more anger. The gender differential grew noticeably wider between the two time frames.
We found that women CEOs were more likely to use language corresponding to the leadership components of diversity, empathy, adaptability, and transformation.
How we use natural language processing to extract data about CEO communication styles
To capture data about CEO communication styles, we collected and analyzed earnings call transcripts from 6,831 CEOs of 5,801 companies in the S&P Global BMI, from Jan. 1, 2020, to March 31, 2022. Men are often disproportionately represented in senior leadership positions, which our dataset reflects: It contains transcripts from 442 women (6.5%) and 6,388 men (93.5%). Our analyses are normalized to compensate for this imbalance. Our sample spans the first quarter of 2020, at the very start of the COVID-19 pandemic, through the end of first-quarter 2022, well into the recovery. The first set of results come from taking the whole sample together and examining the aggregated sentiment scores. We classify communications styles using 10 emotions in our lexicon. This lexicon and associated labels come from the NRC Word-Emotion Association Lexicon, also known as EmoLex, a list of English words and their associations with emotions.
Women CEOs continue to communicate consistently in a more positive manner
We observe women CEOs more frequently using terms associated with positive communication when we perform sentiment analysis. Emotions of fear and joy are also more frequently observed in communications of women CEOs compared with more surprise and anger among male CEOs (see chart 2, which shows the gender differential for each of the 10 sentiments and emotions in our lexicon). In particular, disgust shows the largest gender differential of any emotion. Some of the most frequently used terms associated with disgust in our lexicon are “disease” and “cancer.” This hints at a likely source for this differential: Women CEOs are better represented in the health care industry, which uses these terms more often.
The most frequently used terms that both genders use to express positivity are roughly the same, such as “growth,” “continue,” and “customer.” In contrast, several of the terms with negative associations such as “pandemic” and “risk,” also used by women and men, are likely related to the COVID-19 pandemic.
In contrast, the most frequently used terms associated with positivity do not show such an obvious source arising from gender differential. For a detailed look at the most frequently used terms by gender per emotion, as well as the most-gendered terms for each emotion, see table 1 in Appendix 2.
CEO sentiment shifted from the early to the late stages of the pandemic
To examine the change in these emotions over the nine calendar quarters in this analysis, we aggregated the data for each quarter and broke out each emotion by gender (see chart 3). Several of the emotions show an abrupt shift after first-quarter 2020, which generally serves as a pre-pandemic baseline, and then a more gradual evolution through the pandemic and subsequent recovery.
Unsurprisingly, anger, disgust, fear, negativity, and sadness all spike early in the pandemic and gradually decrease. Similarly, anticipation, joy, and positivity drop and then slowly recover. Trust has an obvious difference in trend between women and men CEOs in the first two quarters of 2020 but varies thereafter.
We observe comparatively more volatility in the trends for women CEOs. This is likely an artifact of the unequal sample size: Our corpus contains around 15 times as many transcripts from men CEOs as from women.
To more clearly examine the broader directional trends, we can separate our time period into two phases: early pandemic (from second-quarter 2020 to the end of first-quarter 2021), and late pandemic (from second-quarter 2021 to the end of first-quarter 2022). See chart 4, which shows the differences or directional shifts in expressions of each emotion between the two periods.
Comparing early pandemic to late pandemic, women CEOs used proportionately more expressions of joy and men used proportionately more anger. Anticipation and fear show large gender differences in certain quarters, different than the overall trend. We also see a directional trend of both men and women using less anger language in the later period.
Men and women CEOs navigated the pandemic differently
We also see the gender differential noticeably growing between the two periods (see chart 5). Granted, both men and women used more joy language in the latter period, but the gender differential grew, with women using disproportionately more of these words.
Quarterly trends also show crossover gender differentials for anticipation and fear (chart 3). Looking at anticipation, we first see women using more anticipation language than men. The gap then narrows and reverses, and then women revert to using more of that language in fourth-quarter 2021 and first-quarter 2022. In the case of fear, we see a narrow gender differential at the beginning, which grows in the middle period, then disappears in the final quarters.
Women CEOs demonstrate diversity, empathy, and adaptability
We mapped language in our sample of CEO transcripts to various leadership styles to observe trends over the period. The literature on leadership styles suggests 11 key components: growth, adaptability, communication, flexibility, accountability, empathy, performance, diversity, transaction, transformation, and cultural. Based on these components of leadership style, we built a model to output contextually relevant words from the transcripts.
Comparing the frequency of use for these terms over our entire sample, we ranked these leadership components in terms of the gender differential we observed. We found that women CEOs were more likely to use language corresponding to diversity, empathy, adaptability, and transformation leadership components. Men CEOs tended to use more language associated with transaction, growth, and performance components. This result aligns broadly with that of last year’s report with one notable exception: Diversity replaced accountability in the top three most female-leaning leadership styles (see chart 1).
Leadership styles of women and men CEOs over time show large shifts
Examining these leadership styles over time, we see significant shifts at the onset of the pandemic. We see an immediate change when WHO declared COVID-19 to be a pandemic. At that point, adaptability, communication, empathy, and flexibility became relatively more prevalent. On the other hand, growth, performance, transaction, and transformation became relatively less prevalent.
After the onset of the pandemic, we observe usage of many of these leadership style terms reverting to their pre-pandemic levels: Adaptability, communication, and flexibility appear to be decreasing to their pre-pandemic baseline. Likewise performance, transaction, and growth have increased back to baseline.
Perhaps more interesting are the leadership styles that are gaining traction and not reverting to baseline. First, women CEOs have steadily increased their use of diversity language throughout the entire study period (see chart 5), making diversity the leadership style most favored by women CEOs during this time. Empathy in recent quarters showed a similar upward trend, but to a lesser extent, among women CEOs. Both men and women CEOs show increased focus on a transformation leadership style, which increased after the immediate onset of pandemic and has remained high.
Some progress but far from equal gender representation
Gaurang Dholakia, Manager Central Data, Strategy & Performance, RASS, S&P Global Market Intelligence
We are still far from gender equality at the CEO level in the over 60 countries or geographies studied in our report.
S&P Global BMI constituents make nearly 75% of market value among all the publicly traded companies worldwide as of Feb. 11, 2022. Even as of Oct. 10, 2022, the market share of S&P Global BMI Index makes it to 74%.
With 5.4% female CEOs as compared to 5% female CEOs in 2021, the increase is just 0.4%. If all the factors remain constant and the annual growth remains the same as well, it would take around 111 years (44.6% increase with 0.4% in one year) to bring parity of male and female CEOs at 50% each.
Industrial, health care, and financial sectors ranked top with the largest shares of women CEOs, and lagging were utilities, energy, and consumer staples.
Women CEOs continue to be significantly outnumbered globally by men CEOs. As of Feb. 11, 2022, only 5.4% of a sample of nearly 8,000 CEOs from the S&P Global BMI were women (see table 2). Clearly, there is still a wide gender gap at the apex of corporate leadership. Doing much better is the participation of women on corporate boards at on average 24% across industries. The utilities sector registered the largest percentage of women on their boards (27% on average), but this doesn’t correlate with the share of women CEOs. The energy sector shows the lowest percentage (21% on average), which does in fact correlate with the lowest share of women CEOs in those sectors.
We saw just a slight increase in the share of women CEOs by 2021. A total of 132 companies hired women CEOs in 2022 since 2020, mainly in the Financials (26), Industrials (20), and Health Care sector (15). Meanwhile 87 companies replaced their women CEOs with men, for a net increase of 45 women CEOs in the past two years.
Sector ranking of Corporate board member in different sectors
Charts 7 and 8:
Countries and sectors with higher shares of women CEOs
Marion Amiot, Senior Economist, and Nicole Serino, Credit Market Research, S&P Global Ratings
The 15 most gender-equal jurisdictions in our study have more than twice the share of women CEOs than in our global data set.
In 2022, gains in a more gender-equal labor force in individual countries don’t appear to be associated with increases in the share of women CEOs.
Both the real estate (8.7%) and health care (8.3%) sectors continue to lead with the highest percentages of women CEOs.
Of the 15 most gender-equal jurisdictions, 10 increased their share of women CEOs in the past two years (see chart 9). Of these jurisdiction, New Zealand and the Philippines had the largest increases in share of women CEOs while Finland experienced the greatest drop in the percentage of women CEOs since 2020. Norway still leads with 13.4% of women CEOs, followed by the Philippines with 12.7% and New Zealand with 12.5%.
Of the 15 least gender-equal jurisdictions, six experienced declines in the percentage of women CEOs (Mexico, Italy, Israel, Malaysia, Netherlands, and Bermuda) in the period (see chart 10). On a positive note, eight of the 15 least gender-equal jurisdictions (Japan, Brazil, Saudi Arabia, India, Spain, Luxemburg, and Russia) increased their shares. Although an improvement, the progress is slow and more strategic efforts are needed worldwide to close the gender gap at the corporate leadership level. Looking at all of the 65 countries in this report (also including geographies that are not sovereigns) covered by the S&P Global BMI, Qatar and Mexico are the only ones with zero women CEOs in 2022.
Taking a sector-specific look at the CEO gender gap, the data suggests that some industries continue to have more women CEOs than others. Both the real estate (8.7%) and health care (8.3%) sectors continue to lead with larger percentages of women CEOs (see chart 11). Although the share of women CEOs in the energy sector increased slightly since 2020, real estate and health care companies are still more than four times as likely to have a women CEO.
One argument explaining the relative dearth of women CEOs is their relatively lower numbers in the labor force as a whole. We do find a positive correlation between the share of women leaders and a higher relative number of women coming to the labor force (more precisely, a lower gap in the labor force participation rate between men and women; see chart 12). However, increases in the share of women CEOs in individual countries or jurisdictions over the past two years don’t appear to have been associated with a more gender-equal labor force. This points to other factors more closely correlated with the rise of women CEOs (for example, changes in perception).
Admittedly, women CEOs need to grow into the role by gathering previous experience first. This means that one year’s change in the labor force participation rate will likely only reverberate in the more distant future. In this regard, the pandemic is likely to have marked a reversal in gender equality. Many women chose to exit the labor force to focus on child care during the COVID-19 lockdowns, making them less likely to attain CEO roles in the future. Indeed, 2020 was the only year the gender participation gap did not shrink since 2000. It even increased (see chart 13). That said, the data also shows the halt was a temporary consequence of the crisis. Since then, women’s participation in the workforce has been rising again relative to men’s.
As in our last year report, we also found that company performance is not correlated with the gender of the CEO, underpinning our thesis that different leadership styles can be associated with similar financial performance. We recognize that the data set is still limited to have definite conclusions on cause and effect. Most of the studies that focus on women representation at managerial levels, C-suit and corporate boards seem to find stronger correlation between diverse management and share price performance.
Diverse leadership for an equitable and sustainable future
Daniela Brandazza, Senior Director and Analytical Manager, S&P Global Ratings; President of WINS (Women’s Initiative for Networking and Success)
Clearly, women lead differently, as our data-driven research shows. But why should men, who dominate the leadership landscape, want to adopt a more empathetic and positive communications style? What incentives are in place to change the status quo, other than voluntary corporate policies promoting diversity, equity, and inclusion?
The answer lies in the still unknown shape of the future of employment. A new generation is joining the labor market, bringing with them different ideas about the meaning of work. These ideas tend to include more flexible conditions, a quest for personal growth, the yearning for a greater purpose and, of course, a strong sense of justice. This includes companies being accountable not only to their shareholders but also to the communities they serve and society at large.
The COVID-19 pandemic accelerated this yearning for new ways of working, as employees from previous generations were suddenly introduced to the benefits and challenges of a much more flexible and dynamic labor paradigm. This qualitative demand from the labor force, combined with the already pressing shortage of skilled people in many nations could be the not-so-subtle nudge that companies are needing to recognize, nurture, and promote a new kind of leadership: One that is more diverse, empathetic, and inclusive, in order to attract, retain, develop, and inspire the talent that is critical to success.
This research aims to contribute with essential intelligence to a better understanding of women leaders as role models in business around the world. Also, it intends to shed light on emerging leadership styles during this time of economic uncertainty and workplace transformation. We believe this research provides data and insights that can contribute to an open and honest conversation about leadership styles that can create a more equitable, productive, and sustainable future.
Appendix 1: How We Constructed Our CEO And Transcripts Databases
Gaurang Dholakia, S&P Global Market Intelligence
S&P Global conducted this analysis based on S&P Global Market Intelligence professionals data, market data, and transcripts data for the constituents of the S&P Global BMI. The S&P Global BMI covers all publicly listed equities with float-adjusted market values of US$100 million or more and that meet minimum liquidity criteria measured by median daily value traded figures.
The S&P Global BMI is made up of the S&P Developed BMI and the S&P Emerging BMI.
Using the S&P Capital IQ and S&P Global Market Intelligence platforms, we screened for constituents of the S&P Global BMI and compiled CEO data for those companies on Feb. 11, 2022. This resulted in a list of close to 13,000 individuals whom we categorized by gender.
Providing a point of comparison was a similar analysis that we conducted for last year’s report; data for that was compiled on Feb. 8, 2020, and Jan. 25, 2021. The resulting narrowed-down sample included CEOs for nearly 8,500 companies worldwide. These companies are S&P Global BMI constituents for which CEO data was available through S&P Global Market Intelligence as of the compilation dates and for whose CEOs we were able to apply a gender category in all three years.
We identified the gender of the individuals in the data set based on several factors, including honorifics, personal pronouns, and given names. The categorization methodology prioritized gender identification based on honorifics, followed by pronouns. If neither of these markers were available in individuals’ biographical data, we used first, or given, names for gender categorization. First name-based gender determinations were largely determined using Genderchecker.com and Genderize.io databases. We looked for possible indicators of gender neutrality and gender identities other than men and women during the classification process.
Assumptions and limitations
As part of the categorization process, we made certain assumptions about gender identity based on these markers. For example, we categorized a CEO as a man if that person’s professional biographical description used the honorific title “Mr.” or the personal pronoun “he,” absent contradictory indicators. We looked for possible indicators of nonbinary gender identities, such as the use of personal pronouns other than “he” and “she,” as well as honorific titles, such as “Mx.,” that might indicate a gender identity other than “man” or “woman.” Even so, we recognize that our assumptions that certain pronouns, honorifics, and given names correspond to certain gender identities may be flawed. It is our hope that the benefits of our research for furthering diversity outweigh potential errors in this classification process.
Appendix 2: How We Analyzed Earnings Call Transcripts
Clayton Davis, Data Scientist, S&P Global Ratings
The Most Frequently Used Terms By Gender Per Emotion, As Well As The Most-Gendered Terms For Each Emotion
Appendix 3: Research And Literature About Leadership
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Avolio, B., Walumbwa, F. & Weber, T. (2009). “Leadership: Current Theories, Research, and Future Directions.” The Annual Review of Psychology. 60, 421-49.
Bassett-Jones, N. (2005). The paradox of diversity management, creativity and innovation, diversity management. Creativity and Innovation Management, 14(2), 169-175.
Chin, J. L. (2014). Women and Leadership. In D. V. Day (Ed.), The Oxford Handbook of Leadership and Organizations (pp. 733-753). Oxford University Press.
Chin, J. L., Lott, B., Rice, J. K., & Sanchez-Hucles, J. (2007). Women and leadership: Transforming visions and diverse voices. Malden, MA: Blackwell.
Credit Suisse. (2012). Large-cap companies with at least one woman on the board have outperformed their peer group with no women on the-board by 26% over the last six years, according to a report by Credit Suisse Research Institute. https://www.credit-suisse.com/about-us-news/en/articles/media-releases/42035-201207.html
Day, V. D. (2014). The Future of Leadership: Challenges and Prospects. In D. V. Day (Ed.), The Oxford Handbook of Leadership and Organizations (pp. 859-867). Oxford University Press.
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Luthans, F. & Avolio, B. J. (2003). Authentic leadership: a positive developmental approach. In Positive Organizational Scholarship: Foundations of a New Discipline, ed. KS Cameron, JE Dutton, RE Quinn, pp. 241–58. San Francisco, CA: Berrett-Koehler.
Mason, E. S. (1995). “Gender differences in job satisfaction”. The Journal of Social Psychology, 135(2), 143-151.
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Mor Barak, M. E. (2017). Managing Diversity. 4th edition, Sage Publications.
Rock, D., Grant, H. & Grey, J. (2016). Diverse Teams Feel Less Comfortable – and That’s Why The Perform Better. Harvard Business Review, September.
Van Knippenberg, D., & Schippers, M. C. (2007). Work group diversity. Annual Review of Psychology, 58, 515-541.
Wood, J. T. (2001). Gendered Lives: Communication, Gender, and Culture (4th Edition). Belmont, CA: Wadsworth Thomson Learning.
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