Female CEOs Judged Harsher Than Male Counterparts: Report

#EachforEqual


In the lead-up to International Women’s Day this Sunday, I’ve been researching female CEOs to identify any measurable disparity between their male counterparts. It didn’t take me too long to find some peer-reviewed papers stating that female CEOs are judged to a higher standard than opposite sex, which is what we’re going to unpack today.


In spite of the fact that there’s a body of research out there suggesting a link between female leadership and more profitable quarters, and their presence on board meetings being a positive influence on the ‘over-confident’ attitudes for more rational decision making in high-stakes situations, research suggests that females are still held to a higher standard than male CEOs.


A 2019 study published by the American Psychological Association was comissioned to explore exactly how gender influences an external audience’s response to organisational failures, and the findings paint a pretty bleak portrait for females in a leadership role. Amongst its findings are the fact that stereotypes surrounding female and male leaders have a tangible impact on how a company survives a major event that is detrimental to the organisation. In addition, it’s written that customers are less likely to purchase a product or service from an organisation with a female CEO than they are a male CEO following an “ethical failure.” The authors of the study, Nicole Votolato Montgomery and Amanda P. Cowen wrote in their introduction that “in recent years, there has been increased focus on the representation of women in leadership positions and on what organisations can do to help women succeed when they attain these roles. Such efforts have arisen in response to considerable research showing that female leaders are often evaluated differently from their male peers. In particular, women receive less credit, and fewer rewards, for positive organisational outcomes when compared with men in similar leadership roles.”


“The leader’s gender and failure type (ethical, competence) interact to affect individuals’ perceptions of, and propensity to support, an organisation after failure,” they noted. “Our findings contribute to the literatures on female leaders, organisational failures, and the influence of norms on evalutator judgements.”


Associate Professor of Commerce at the University of Virginia said that “people tend to associate women with communal traits like likability, warmth and relatability.” This translates to a customer’s expectation that a female-led organisation should be more ethical, but also gives the customer reportedly lower expectations of a company’s ability to produce a quality product or service. “Women who are written about as more independent [and] more skilled, as opposed to using more communal traits has implications for how consumers perceive these crises, and then their interaction with the companies,” she added.


I think it’s worthwhile ending this piece on a positive note, rather than a negative- so let’s pivot to the work of Dr Farida Akhtar, a Senior Lecturer with the Department of Actuarial Studies and Business Analytics at the Macquarie Business School in Sydney. Dr Akhtar analysed data specifically on gender performance at S&P500-indexed companies between the years 2000 to 2015, and upon publishing the research said that “firms with a critical mass of females on the board (three or more) have stronger corporate culture with regards to their intangible assets, including employees.”


“Females are fundamentally different from males and bring unique demographic skills. They nurture their employees more. They create better reward systems and greater flexibility. Companies in high technology industries and those with unique products that are scarce in the market tend to do better with female CEOs. Success in research and development (R&D) is highly prized in these companies and female directors can shape innovation and sustainable growth strategies.”


She does mention, however, the premise of this piece, stating that “institutional shareholder also create a clear discrimination against female directors in the leadership appointment process,” but hopes the fact that “science says women are better leaders and companies led by women tend to do better,” will counter this in the hearts and minds in the business world.

I'll see you in the next piece in the lead up to International Women's Day this Sunday.


For now, thanks for your time.


Kobi Simmat.

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