Falling Down Hard: Gender Differences in Top Management Turnover

<p>We find that top female executives depart from their employers at elevated rates, in the range of 15–20% higher than those of men, even after controlling for a comprehensive set of covariates.&nbsp; This gender difference is evident for all members of the top management team except the CEO.&nbsp; Elevated turnover rates for women do not appear to reflect higher rates of voluntary exits, as post-turnover opportunities are similarly poor for both genders, women receive severance payments at least as often as men, and the gender-turnover gap is prominent for executives below traditional retirement age.<br> Our findings suggest that female executives are evaluated more harshly than their male peers.&nbsp; Supporting this interpretation, the gender gap in turnover diminishes in firms with characteristics that are likely to reduce bias in dismissal decisions.&nbsp; Moreover, the gender turnover gap is particularly pronounced when firms perform poorly, suggesting that female executives are disproportionately blamed for subpar results.&nbsp; We consider efficiency-based explanations for the gender gap in turnover but fail to uncover supportive evidence.<br> Most executives below retirement age reemerge in new positions after turnover, but the roles they obtain are, on average, materially inferior to their prior positions based on imputed salary estimates.&nbsp; Across the full sample period, we detect no systematic gender differences in the quality of post-turnover outcomes.&nbsp; However, recent years show an improvement for women, who now experience better outcomes than men on average after turnover.&nbsp;<br> Overall, top female executives face a significantly higher probability of unfavorable turnover events, defined as departures followed by either no reemployment within two years or new employment that represents an apparent significant career setback.&nbsp; There is no evident improvement in this gender gap over time.&nbsp; Women over the sample period are slightly more likely to experience positive turnover events in which they depart and secure an attractive new position within a reasonable timeframe.&nbsp; This favorable difference for women has increased significantly over time, reflecting women’s improved post-turnover prospects in recent years.<br> Despite these improvements, the playing field has only partially leveled, as the elevated rate of adverse turnover outcomes for women remains substantially higher than the offsetting increase in their favorable outcomes.&nbsp; The gradual narrowing of the gender gap near the top of the corporate hierarchy, in terms of net career turnover risk, mirrors a similar decrease in the gender gap with respect to internal promotions.&nbsp;&nbsp;</p>