Diversity | Female CEOs face a greater risk of sacking, even when their firm is doing well

Female CEOs face a greater risk of sacking, even when their firm is doing well

Female CEOs are far more likely to be fired from their roles than their male counterparts, even when the firm they are leading is doing well – Pacific Standard reports.

This is according to a study from the University of Alabama, in which researchers searched through media reports to compile a database of CEOs who were dismissed between 2000 and 2014. "We classify a CEO departure as a dismissal when it is reported that the CEO is fired or forced out or resigns or leaves as a result of policy differences or pressure," the researchers explained.

The research reveals that 2,416 CEOs left their positions during that time, with classified 641 as dismissals. While women made up only about three per cent of the CEOs in the sample, they were dismissed at a higher rate than men, with five per cent getting fired compared to three per cent of their male peers.

"Female CEOs are approximately 45% more likely to be dismissed than male CEOs," the report stated. "Perhaps more importantly, we find that while the rate of male and female CEO dismissal is similar when the firm is performing poorly, female CEOs are significantly more likely to be dismissed than male CEOs when the firm is performing well."

The well-known theory of the ‘glass cliff’ suggests women are more likely to be appointed to a leadership role when a company is in a crisis or when the chance of failure is high – but this research suggests that even when success is achieved, women are still more likely to be dismissed.

"Minorities such as female CEOs often experience enhanced visibility and attention, exaggerated stereotypes, and heightened monitoring and scrutiny," the study authors noted, adding:

"cultural stereotypes associating leadership with masculinity can undermine evaluations of women's competence and ability to lead."

Fast Company reports that other researchers have noted similar phenomenon which also encompasses BAME people. Researchers from Utah State University analysed all CEO transitions in Fortune 500 companies over a 15‐year period with an eye toward the leadership tenure of women and racial and ethnic minority CEOs.

“Consistent with the theory of the glass cliff, we find that occupational minorities—defined as white women and men and women of colour—are more likely than white men to be promoted to CEO of weakly performing firms,” they wrote.

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