Study Reveals Why We Need To Debunk 'Glass Cliff' Theory

A recent study has found that women are more likely to be hired as Chief Executive Officers in financially thriving companies. In a paper titled 'Female CEO selection: Does the glass cliff exist?', published in The Leadership Quarterly, researchers reveal that as a company's financial stability improves, the likelihood of a woman being appointed CEO increases. The study examined data on 10,348 CEOs, including 526 women, at all publicly held US companies on major exchanges from 1998 to 2022.

This study contrasts the popularly believed 'glass cliff' phenomenon that women are mostly hired in precarious roles. According to experts, this theory has often led to women hesitating to take up leadership roles. However, researchers say that women are typically seen as 'profitable' and appointed to senior leadership at more stable organisations.

Notably, this does not mean that women are more likely to be hired as CEO than men; the gender gap and underrepresentation of women and minority groups in leadership roles continue to exist. However, the study notes that women CEOs are not intentionally appointed to financially unstable positions or 'set up for failure'.

What Is Glass Cliff?

The glass cliff is a phenomenon according to which women are more likely to get leadership roles than men during times of crisis. They can offer solutions to the same problems in society. Considering themselves as what Michelle Ryan and Alex Haslam, of the University of Exeter, have termed the “glass cliff.” The question is how did it occur and why it is necessary?

In a study, Ryan and Haslam examined the performance of the Financial Times Stock Exchange index or FTSE 100 companies before and after the designation of new board members and found that companies that appointed women to their boards were more credible than others to have experienced systematically bad performance in the previous five months.

This work in time cultivated into the occurrence known as the glass cliff, like the concept of a glass ceiling. The only difference was that it enabled women to recognize a cliff's obvious border rather than the false promise of elevated organizational positions which can be "seen" through a ceiling of glass but are actually unreachable.

Explanation

The Harvard Business Review 2011 conducted two experiments. In the first one, they asked 119 college students to read two newspaper articles about an organic food company. The first article discussed the future withdrawal of the CEO. Creating two versions of the piece, where the company was currently and historically headed by men in one, and, headed by women in the other, the review also created two versions of the second article.

The second article dealt with the company’s financial status, so some students read about a company that was growing, and others about a company that was closing stores and firing people. Then they asked the students to choose between two equally qualified candidates for CEO, one male and one female. “62% of the students who read that scenario chose the male candidate. But when the male-led company was in crisis, 69% chose the female candidate,” the review said. This is how the glass cliff was understood back then. 

Why the glass cliff theory needed to be debunked

Many experts noted that the glass cliff phenomenon often hurts women executives' reputations and career prospects. When a company does poorly, people tend to blame its leadership without taking into account situational or contextual variables. And they blame women even more. 

Researchers have found that female leaders find it more challenging than men to get second chances once they have failed due to having fewer advisers, and patrons. They also have less access to a protective "old boys' network", an informal system in which moneyed men with similar social or educational backgrounds help each other in business matters.