Only six new retail CEOs in a 2022/23 Korn Ferry study were women, clocking in at 15 percent. And even more troubling, half the companies with a previous female CEO replaced her with a man for a net loss of six female retail CEOs in the year. The study started with 31 percent of the 39 outgoing CEOs as women; it ended with 15 percent. By Pam Danziger

While retailers typically recognize the value of diversity in their workforce, women still face an uphill battle when it comes to inclusion in the top CEO slot. Women are well represented in retail C-suites in female-centric marketing, merchandising, customer relations and human resources departments, but that’s not the natural stepping stone leading into CEO positions.

From the sales floor to the C-suite, the retail industry is facing an unprecedented employment crisis, and none as pressing as the spate of CEO vacancies. While board members step in during the CEO interim, they’ve apparently gotten tired of wearing two hats; the pace of selecting a permanent CEO has picked up.

Now Hiring

Some 39 of the largest U.S. retailers appointed permanent CEOs from October 2022 through September 2023, according to management consulting firm Korn Ferry. The bulk of them (25) were appointed during the second and third quarters. VF, Gap, Macy’s, Dollar General, Sephora, Victoria’s Secret, Kohl’s, Bath & Body Works, 1-800-Flowers and Advance Auto are among the major companies that have recently filled CEO vacancies.

John Long, Korn Ferry’s North America retail sector leader, crunched the data and found nearly 60 percent of the incoming CEOs were internal promotions. “The number was higher than I thought it might be,” he said. “At least in this particular sample of retailers, it suggests these companies were doing a good and thoughtful job in succession planning.”

That would seem to be the case for Macy’s, which has promoted Bloomingdale’s Tony Spring to take over the top job at Macy’s, Inc. from Jeff Gennette. Walter Jelinck’s pick of righthand man Ron Vachris will replace him as Costco CEO (an appointment that didn’t meet Korn Ferry’s report cutoff date).

And in more news, some 80 percent of incoming CEOs hailed from the retail industry; only seven were recruited from outside, mostly from CPG and hospitality firms.

Women Get the Short End of the Stick

One data point was troubling. Only six new retail CEOs in a 2022/23 Korn Ferry study were women, clocking in at 15 percent. And even more troubling, half the companies with a previous female CEO replaced her with a man for a net loss of six female retail CEOs in the year. The study started with 31 percent of the 39 outgoing CEOs as women; it ended with 15 percent.

And those outgoing women’s tenures were 2.5 years shorter than men’s, meaning they were afforded less time to make their mark on the company. Overall, the average tenure for an outgoing CEO was 5.8 years. “It takes a while to turn things around and drive performance,” Long said, “I look at a minimum five-year time horizon for a large company to see sustained results. Hiring somebody and then saying after two years, it didn’t work is expecting too much of one person.”

Long points out that this is the first time he’s looked specifically at turnover in retail CEOs so the findings may be inconclusive; however, he promised to continue updating the data so longer-term trends can be identified. He also affirms that a sample size of 39 is sufficient to develop hypotheses to be tested over time.

The hypothesis that women are losing ground in the top spot in retail got further confirmation when Walgreens picked Tim Wentworth to replace outgoing Rosalind Brewer. “That announcement missed our September 30th cutoff, but that’ll definitely be in the next report (12 months ending December 31st),” he noted.

Parity? Not Even Close

Allsorter recently analyzed 1,000 of the world’s largest companies and found just 64 CEOs were female: 94 percent were men. “This simply isn’t acceptable in 2023,” said Franck Fogliarese, Allsorter’s chief revenue officer. Female representation in Fortune 500 companies is slightly higher, topping only 10 percent with 53 women CEOs at the helm.

Women are less likely to hold onto the top job over the long term, according to research published in the Journal of Management. Female CEOs have a 45 percent higher likelihood of being fired than their male counterparts, the study found.

“Dismissing the CEO is usually viewed as evidence of good corporate governance since it suggests that the board is taking its monitoring role seriously; however, our research reveals there are invisible but serious, gender biases in how the board evaluates CEOs and its decision to retain or fire particular CEOs,” said the study co-author Dr. Sandra Mortal, associate professor at the University of Alabama’s Culver College of Business.

“The results of this study point to the extra pressure and scrutiny directed at women in senior leadership positions relative to their male counterparts,” co-author Dr. Vishal Gupta added. “This is problematic because women face difficult barriers and obstacles in breaking through the proverbial glass ceiling, but they also seem to continue to face additional challenges even after reaching the top of the corporate hierarchy.”

The Robin Report’s Kimberly Minor recently wrote of those challenges. “There is a very small learning curve and very high expectations,” said Christiane Pendarvis, past president of Savage x Fenty. Korn Ferry’s analysis would confirm that; retail boards have been less patient when women are at the helm.

Commenting on Mortal and Gupta’s study, clinical psychologist and management consultant Bob Murray Ph.D. wrote, “Many studies have suggested that overall, women make better leaders. Boards should be actively encouraging more talented women to take on leadership roles and dispense with the idea that men make more ‘natural’ leaders because it isn’t true!”

Righting a Wrong

“Only 16 percent of CFOs at Fortune 500 and S&P 500 companies are women,” she observed and CFOs overwhelmingly get picked to fill the CEO position. “Retailers need to have succession plans in place that include women with financial acumen.”

Regarding succession, she advises retailers to identify bottlenecks in the path to promotion that could be holding women back. “If retailers see an uneven ratio of ‘women eligible for promotion’ to ‘women promoted’ that is a sign that action is needed,” she said. “Retailers can then address the imbalance, ensuring their recruitment and career development assessments are gender-neutral and performance-focused.”

Board Representation Gaps

Also holding women back is the under-representation of women on retail boards. “Since corporate boards are making CEO hiring decisions, if more women were on retail boards, it’s likely there would be greater equality in CEO gender,” Campanelli said.

Only about 30 percent of the board seats among the Russell 3000 Index are held by women and only 7 percent by women of color, according to the 50/50 Women on Boards report. And women are gaining ground at a snail’s pace. From 2020 to 2021, women joining boards increased by 3 percent, but slowed to 2 percent in 2022 and then to 1 percent in 2023. This suggests a setback in diversifying boards. “At this rate, gender parity isn’t expected until 2044, emphasizing the urgency for accelerated change,” the report stated.

Having more women on boards pays off, especially retail boards where women are over-represented among the company’s employees and customers. Gender diversity firm Pipeline found that companies with higher female board representation outperform those with fewer by a “significant margin.”

Moving Ahead

Since women have nowhere to go but up, Campanelli suggests the following steps to help them advance in their retail careers:

Build a strong network. The corporate world is a network of relationships, and those with the strongest networks are often the ones who advance.
Find a mentor. Mentorship is advantageous to all individuals involved, including the mentor, mentee, and organizations. It leads to more significant career advancement, reduced turnover rates, and increased investment in the organization.
Join leadership groups. Women should encourage their companies to join groups such as the Women in Retail Leadership Circle, an exclusive community of women executives that collaborate with companies to provide leadership training and development for their current and future leaders. And in some cases, WRLC works in tandem with companies to enhance the programs they already have in place.

“The trend of hiring from within noted by Korn Ferry’s research is a positive sign. Yet there is still a great imbalance when it comes to female CEOs,” she shares as she points to a study by McKinsey and Company that found companies with greater gender diversity among senior leaders are more profitable.

Specifically, McKinsey found companies with more than 30 percent women on their executive teams are significantly more likely to outperform those with between 10 and 30 percent women, and these companies in turn are more likely to outperform those with fewer or no women executives.

“As a result, there is a substantial performance differential – 48 percent – between the most and least gender-diverse companies,” the report stated. Given the performance challenge that many retailers face in the current environment, there should be more demand for women to assume CEO leadership positions, not less. We hope – and retailers would greatly benefit – that the current trend reverses and more women will be appointed to retail

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MIA: Female Retail CEOs