Dive Brief:
- Recent research is clear: the C-suite gender gap is real. And now, there is research to show that even when they reach the CEO pinnacle, women continue to face discrimination from shareholders, according to Fast Company.
- The study, from the W. P. Carey School of Business at Arizona State University (ASU), determined that gender is the leading factor as to whether or not a CEO will be under attack by shareholder activism.
- The most telling piece of data in the study is that with all other factors being equal, female CEOs have a 27% higher likelihood of facing shareholder activism, while male CEOs have a near zero predicted likelihood of being targeted.
Dive Insight:
The researcher, Christine Shropshire, an associate professor of management at ASU, studied shareholder proposals at Fortune 1000 companies between 2003 and 2013. She found that the rate of shareholder activism (an attempt by shareholders to take control of a company) remained consistent across industries, company sizes and performance levels. So, according to the study, that 27% figure shows that gender alone accounts for the significant activism specifically aimed at female CEOs.
Shropshire's reports say women CEOs are subjected to more shareholder activism than male counterparts because they are "perceived as weaker, and thus easier to push around."
"There have been several previous studies that find a negative market reaction to the appointment of a female CEO. At the time a female CEO is announced, the stock price drops," Shropshire wrote in her report.
The true irony here is that different research, "Is Gender Diversity Profitable? Evidence from a Global Study," from EY and and the Peterson Institute for International Economics, found that an employer with 30% female leaders could add up to six percentage points to its net margin.
