The Precarious Glass Cliff

So you’ve made it past the glass ceiling. But what of the glass cliff?

Back in 2003 a Times article in London reported that top companies with women on their boards of directors experienced decreased annual share price compared to companies with boards with less, or even no women. Sounds suspicious?

Michelle Ryan, Professor of social and organisational psychology at the University of Exeter, investigated and instead found the reverse – organisations that were already in crisis were more likely to appoint women to their boards of directors. Ryan and her colleague Alex Haslam named this precarious position the ‘glass cliff’.

Were women being set up to fail, intentionally or unintentionally?

Researchers hypothesised that women were more likely to accept a CEO position in a weakly performing firm- a rare opportunity to lead, while men would pass it up as an avoidable suicide mission, knowing that another opportunity would be just around the corner.

It could also be that struggling companies may choose a non-traditional leader, such as a woman or a person of colour, to signal a daring shift in a new direction. If they failed to bring the company back from the brink they could be blamed for the deterioration and replaced by the typical white male CEO. Sociologist Christy Glass, a sociologist from Utah State University, termed this the ‘saviour effect’.

A form of bias, ‘shifting standards’ can be observed in how poorly performing women CEOs are more likely to receive greater attention than similarly performing men CEOs. Women CEOs even once they have the job are still perceived as more vulnerable and were 28% more likely to be target of activist investors i.e. being requested to make changes, add/ remove board members or even be driven out of their positions by investors. In one case activist CEOs commandeered up to 25% of a female CEO’s time. This disproportionate focus would logically contribute sexist confirmation bias i.e. women wreak havoc in positions of leadership and should be avoided.

Regardless, evidence suggests that female CEOs do just as well if not better than their male counterparts, and that organisations placing more women in leadership were more profitable. Quotas are one way, but also elucidating bias hotspots in recruitment, assessment and promotion processes.

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