When Beauty is Beastly: Facial Attractiveness of Female CEOs and Investor Reactions to Acquisitions

Abstract

The increasing presence of women in corporate executive positions has sparked research on gender bias against female leaders. Prior work in the management area has focused on between-group gender bias in which female executives are compared to their male counterparts, which has led to mixed findings. In this study, we move beyond prior management work to explore within-group variability of gender bias in which some female executives encounter greater levels of gender bias than others do. Specifically, we investigate a personal attribute that contributes to within-group variability: facial attractiveness. Building on gender role congruity theory and the beauty-is-beastly effect, we propose that more, as compared to less, attractive female CEOs are viewed as less competent to manage stereotypically male-typed strategic actions, such as acquisitions. In a sample of female CEOs of public firms in China, we hypothesize and find that investors react more negatively to acquisitions conducted by more attractive female CEOs than to those conducted by less attractive female CEOs. Moreover, we find that this within-group bias is reduced under conditions in which there are more positive media reports about the focal female CEO, and in industries in which female CEOs are represented at a higher rate. Finally, in supplementary analyses, we assess within group male CEO attractiveness, but find that it does not influence investor perceptions of male CEO competence in conducting acquisitions.