Gender and CEO Dismissals

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Mary T. Barra. Lynn J. Good. Michele Buck. Susan N. Story. What do all these women have in common? People who know their corporate leaders will recognize them as CEOs of S&P 500 companies. They lead General Motors, Duke Energy, Hershey, and American Water Works, respectively. 

Rising to the top of their profession is noteworthy in itself. But, what makes these women even more remarkable is the fact that, as of January 2019, they represented 4 of the 24 women to hold such posts. Or, put another way, only 4.8 percent of all S&P 500 CEOs are women. 

For years, researchers who examined this topic focused on what they called the glass ceiling—a real but invisible barrier that limited women’s advancement in corporate America. 

Though the glass ceiling focuses on access to jobs, understanding who keeps their jobs is also important. Indeed, some management scholars have suggested that women are more likely than men to be fired, especially when there is ambiguous information to inform the decision. In the face of such uncertainty, other factors, like gender stereotypes, might play a more central role. 

Recently, Vishal Gupta, of the University of Alabama, and his colleagues, examinedthis possibility, with a focus on gender disparities in CEO dismissals. They collected data from over 2300 companies from 2000 to 2014. 

They found that women CEOs were 45 percent more likely than men to be fired. Of course, this finding might mean that women are poorer leaders, and thus, their poor performance warrants the dismissal. 

Gupta and colleagues examined this very possibility. When the firm performed poorly, women and men were equally likely to be fired. However, as firm performance improves, the likelihood of men being fired diminishes considerably. The same is not true for women, though, as their likelihood of being fired was the same, irrespective of firm performance.

The authors concluded that: “our results contribute to a deeper understanding of what happens to men and women who make it to the top of the organization hierarchy, revealing the higher risks women face of being dislodged from their leadership position.”