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Female CEOs Are Nearly Half More Likely To Be Fired As Their Male Counterparts

Women CEOs are 45 percent more likely than males to be dismissed from firms, according to a new study accepted for publication in the Journal of Management. Even if they improve their work, female bosses are still more likely to be fired than men who have stepped up their performance.

“The bias against women in leadership roles is believed to be rooted in widespread stereotypical beliefs that associate the characteristics needed for success as a leader with men but not with women,” wrote the authors.

What’s more, the authors note performance matters for males but not for females. The rate of male and female CEO dismissal is similar when the firm is performing poorly, but female CEOs are significantly more likely to be dismissed than males when the firm is performing well.

“Dismissing the CEO is usually viewed as evidence of good corporate governance as it suggests that the board is taking its monitoring role seriously, however, our research reveals there are invisible but serious, gender biases in how the board evaluates CEOs and its decision to retain or fire particular CEOs,” said study co-author Sandra Mortal in a statement.  

Forget the “glass ceiling” argument. The researchers say that as the number of women entering leadership roles continues to rise, they could be heading straight for a “glass cliff” as they face “more perils and risks compared to their male counterparts.”

Women are more likely to adjust their careers than men. RossHelen/Shutterstock

To examine whether the gender of a CEO influences the likelihood of their dismissal, the researchers used a combination of statistical research paired with econometrics to see if there was a disparity between the two. First, they pulled news releases and media reports of instances when a CEO left a company, given these events are typically newsworthy items. They found 641 dismissals between 2000 and 2014, which they then compared against data from nearly 2,400 firms containing that person’s age, affiliation, whether or not they left voluntarily, and eliminating any dismissals within the first year.

“The results of this study point to the extra pressure and scrutiny directed at women in senior leadership positions relative to their male counterparts,” study co-author Vishal Gupta said. “This is problematic because women face difficult barriers and obstacles in breaking through the proverbial glass ceiling, but they also seem to continue to face additional challenges even after reaching the top of the corporate hierarchy.”

It’s important to note a few limitations. For starters, it can be difficult to tell when a person is fired because of the soft language used in press releases. There is also selection bias – some firms who have a female CEO may have different values than those with men in leadership. Lastly, the research doesn’t capture why that person was fired. For example, women are more likely to adjust their careers than men. 

Nonetheless, the researchers say their work highlights the risks businessma’ams face in leadership and the fact that even after having reached the highest position possible, they are still disproportionately forced out of leadership roles.

Read more: https://www.iflscience.com/editors-blog/female-ceos-are-nearly-half-as-likely-to-be-fired-as-their-male-counterparts/

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