Saturday 23 January 2016

Female CEOs and the glass cliff

We've all come across the concept of the glass ceiling. It's a metaphor to describe the way that women often can't seem to get promoted up the career ladder beyond a certain point, even though official policies may be in place to encourage equality. There have been some changes in this over the last couple of decades, and the glass ceiling is now positioned considerably higher than it once was, but there are still particular challenges which women face when aiming for the top jobs, and progress towards equality seems to have slowed down in the last five years or so.

The reasons are complex, but one line of research from Michelle Ryan and Kim Peters sheds some light on it.

Ryan and Peters have coined the term the 'glass cliff' which describes a particular phenomenon which senior women can face in the board room. Their research was sparked off by an article in The Times a decade or so ago which showed that the share price of an organisation was likely to fall immediately after a women was appointed to the role of a CEO. The Times reported this as an indication that women CEOs caused poor performance, but Ryan and Peters looked more closely at the data and found alternative explanations.

First they found that although share prices went down after female CEOs were appointed, there was no evidence that performance decreased. Share prices are a measure of confidence, and it seems that although female CEOs were no worse (and indeed no better) than their male counterparts at actually managing the performance of their organisations, the shareholder-buying public imagined that the appointment of a new female CEO would cause company performance to dip. They sold their shares and the prices went down.

The second interesting thing Ryan and Peters did (and this is where the glass cliff comes in) was to look at the direction of travel of share prices before the appointment of new CEOs. They found that female CEOs were more likely to be appointed to organisations whose share prices were already falling: women were appointed as CEOs to failing companies. This of course means that the female CEOs had an uphill struggle in trying to make their organisations successful, and were more likely to fail.

This, you can well imagine, does nothing for these women's careers, or for more diverse board rooms. Leaders, particularly non-prototypical leaders, tend to be blamed for organisational failures, and leaders of failing organisations have a harder time getting new jobs, both of which will contribute to the stagnation in the progress towards equality in the board room.

The research seems to suggest that there are a number of reasons for the over-recruitment of women leaders in struggling organisations. First, in times of crisis we are more likely to take risks (in a last ditch attempt to save the organisation, we'll try anything to save the firm - even appointing a woman!). Then it is thought that women's typical leadership skillset might be particularly suited to dealing with organisations in crisis. Finally, the men who might trump women in leadership selection processes in other circumstances are less likely to apply for senior positions in failing firms - the jobs don't look secure so they don't go for them, leaving the field clear for women.

This glass cliff effect has been seen in a range of other arenas in the private and public sectors, and in politics: one study of Tory MPs showed that whilst female MPs tended to have secured fewer votes than male MPs, this was entirely explained by the fact that they were put forward in seats which were less safe. The same effect has been shown with candidates from BME backgrounds: a study in the US found that black basketball coaches were more likely to be appointed to failing teams.

One other somewhat dispiriting piece of research explored how members of the public explained the glass cliff phenomenon when presented with the evidence. Women were more likely to accept its existence and to think that it is a result of fundamental unfairness in the work place and in society more broadly. Men were more likely to deny it's existence, or explain it away on the grounds that women just aren't as suited to difficult leadership challenges.

Ryan, M.K., Haslam, S.A., Morgenroth, T., Rink, F., Stoker, J. and Peters, K. (in press) Getting on top of the glass cliff: Revieing a decade of evidence, explanations and impact The Leadership Quarterly

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