By Chris Groening *
(exechange) — September 1, 2019 — A recent analysis of CEO departures by exechange has revealed that female CEOs were more likely to be pushed out than their male counterparts (1).
Studies provide some evidence that this occurrence may be due to the appointment of female CEOs when situations are riskier or where success is less likely (2).
In other words, there is evidence that women are more often set up to fail than men.
A recent paper I wrote examines an Italian law that mandated the appointment of women to boards (3).
What was novel about my study was investors did not know which specific women would be appointed to the board, only that the board had to appoint (more) women.
Investors were more receptive to the enactment of this law for firms that were more likely to benefit from diversity.
Specifically, firms that had low levels of women on their boards increased in value if their boards had low levels of women on board committees, if the CEO was also chair of the board (and thus difference of opinions is minimized) or if the firm was in an industry that had more competition.
This value increase occurred with the law’s enactment, not with the appointment of the women.
The take-home message from my study is that perhaps female CEOs might fare better if they were not placed in firms that are sinking ships but rather in firms where the diversity they bring is valued.
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(1) https://exechange.com/9a2019/
(2) https://www.researchgate.net/publication/327708683
(3) https://doi.org/10.1108/CG-01-2018-0012
* The writer is an Associate Professor of Marketing at Kent State University. He researches the financial impacts of corporate social responsibility. cgroenin@kent.edu.
Editor’s note: This is a guest post.