Female Chief Executive Officers Research Articles

The gender difference in leadership effectiveness and its Sino-US comparison

PurposeThere are mainly two viewpoints on women’s leadership effectiveness compared with that of men – the questioning view and the admiring view, two points of view that are not in agreement. Based on that, this study aims to find the gender difference in leadership effectiveness.Design/methodology/approachThis study uses carefully matched male and female presidents (223 pairs) of Chinese listed companies and male and female chief executive officers (141 pairs) of American listed companies as samples. Analysis of variance was conducted to analyze the indicator data of the leadership effectiveness.FindingsThe findings show that women’s leadership effectiveness is not significantly inferior to that of men, and that women’s leadership effectiveness compared to that of men in the Chinese cultural context is not inferior to that in the American cultural context. The findings do not support the questioning view of women’s leadership effectiveness.Originality/valueThis study first uses the carefully matched (female/male leaders) data of Chinese listed companies and American listed companies as samples to find which viewpoint (the questioning view and the admiring view) is supported or is not supported.

Physical Characteristics of the Chief Executive Officer and Firm Accounting and Market-Based Performance

Despite the key role of the Chief Executive Officer (CEO), extant literature pays little attention to the physical characteristics of the CEO. Therefore, this paper investigates certain physical characteristics - such as age, gender, ethnicity and nationality of the CEO in relation to accounting (ROE) and market-based (market value) firm performance. The paper applies OLS with robust standard errors to a panel composed of 1600 firm-year observations of non-financial Malaysian listed companies between 2010 and 2014. The results reveal that the ethnicity (Chinese) and nationality (foreign) of a CEO have a significant positive association with both proxies of firm performance, while the age of the CEO has no significant effect. Moreover, a female CEO has an insignificant and significant positive relation with ROE and firm market value, respectively. Alongside contributing to the limited literature that exists in relation to the subject, the paper provides important insights for regulators, shareholders, investors, banks, corporate boards and financial institutions in regards to the evaluation of firms and the allocation of economic resources.

Female executives and corporate governance

PurposeThe purpose of this paper is to examine whether the gender of the top executives is associated with the strength of corporate governance mechanisms within a firm.Design/methodology/approachThe paper uses panel and instrumental variable regressions on an eight-year sample of the S&P 1,500 firms.FindingsThe results indicate that firms with female Chief Executive Officers (CEOs) and Chief Financial Officers have higher quality governance practices. Moreover, female CEOs are documented to have the most significant influence on the governance attributes related to the board of directors and takeover defenses mechanisms.Originality/valueOverall, these findings indicate that the gender of the firm’s executives may have important implications for the strength of corporate governance. The paper promotes the importance of the recent national policies in numerous countries on gender quotas at the executive level.

Are CEOs More Likely to Be First-Borns?

We investigate the link between birth order and the career outcome of becoming Chief Executive Officer (CEO) of a company. CEOs are more likely to be the first-born, i.e., oldest, child of their family relative to what one would expect if birth order did not matter for career outcomes. Both male and female CEOs are more likely to be first-born. However, the first-born advantage seems to largely reflect the absence of an older brother, but not of an older sister. These results are more pronounced for family firms, where traditionally the oldest child is appointed to run the family business, but also hold for non-family firms.

Gender-inclusive Gatekeeping: How (Mostly Male) Predecessors Influence the Success of Female CEOs

Male-typed leadership schemas have been widely acknowledged as barriers to women’s success in leadership roles. We explore how local organizational agents and contexts enable women leaders to overcome these barriers and achieve success at the highest levels in firms. Specifically, we focus on chief executive officer (CEO) succession events and study how several facets of predecessor CEOs and the succession context combine to influence incoming women’s post-succession performance. We conduct a qualitative comparative case study of all CEO successions that involved female successors between 1989 and 2009 across the largest corporations in the United States. Our findings suggest that women’s success occurred when a confluence of local firm-level factors and attributes of the (mostly) male predecessors promoted gender-inclusive gatekeeping during succession. Our qualitative comparative analysis approach reveal three recipes for female success: “handing over the legacy,” “partnering the legacy,” and “turning a...

CEO Age and CEO Gender: Are Female CEOs Older Than Their Male Counterparts?

Motivated by the debate on gender inequality, we study CEO gender and CEO age. Because women face significantly more obstacles in advancing their careers, it may take them longer to reach the top position, i.e. the chief executive officer (CEO). If this is the case, female CEOs should be older than their male counterparts on average. Based on over 12,000 observations across 15 years, our evidence shows that female CEOs are actually younger on average, approximately two full years younger than male CEOs, after controlling for firm and board characteristics. The two-year difference represents as much as 26% of the standard deviation in CEO age. We confirm our results using several robustness tests including a fixed-effects analysis, propensity score matching, as well as an instrumental-variable analysis. The results are robust and do not appear to be driven by endogeneity. Because it is substantially harder for women to become a CEO, those who are successful must possess extraordinary skills, enabling them to be a CEO younger.

The glass ceiling in context: the influence of CEO gender, recruitment practices and firm internationalisation on the representation of women in management

This study examines macro‐level organisational determinants of women in management. Specifically, we examined organisational characteristics and strategies, including firm levels of internationalisation, firm foreign ownership, chief executive officer gender and the active recruitment of women, as predictors of an organisation's level of representation of women in management. Results from a survey of 278 firms indicated that the presence of a female chief executive officer and an organisation's active recruitment of women are positively associated with a firm's percentage of women in management while firm internationalisation and firm foreign ownership are negatively associated with the representation of women in management. Overall, these findings suggest that although firms exercise discretion with respect to hiring and promoting women, they are also constrained by the external environment and organisational characteristics. For example, firms with higher levels of firm internationalisation and that are foreign‐owned may limit their efforts and investment in the advancement of women into management.

CEO age and CEO gender: Are female CEOs older than their male counterparts?

Motivated by the debate on gender inequality, we study CEO gender and CEO age. Because women face significantly more obstacles in advancing their careers, it may take them longer to reach the top position, i.e. the chief executive officer (CEO). If this is the case, female CEOs should be older than their male counterparts on average. Our evidence shows that female CEOs are actually younger on average, approximately two full years younger than male CEOs, after controlling for firm and board characteristics. The two-year difference represents as much as 26% of the standard deviation in CEO age.

The relationship between board leadership structure and earnings management in Asia-Pacific

Purpose This study aims to review the growing research area of behavioral corporate governance; it explores the relationship between CEO duality attributes and earning management in the context of Asia-Pacific countries. Over time, the use by boards of chief executive officer (CEO) duality has fluctuated, and the scholarly conceptualizations of the phenomenon have become more complex. Design/methodology/approach This paper uses panel data from 330 firm years from Australia, Malaysia, The Philippines and Pakistan by taking a sample of three years from 2011 to 2013. Findings The results of the analysis reveal that the board leadership structure was not associated with firm performance and financial reporting quality. However, female CEOs impacted negatively on firm performance in Malaysia, The Philippines and Pakistan. Further analyses expose that the firm size was negatively related with performance, whereas established firms in Australia had strong reporting quality. However, large boards assured healthier reporting quality in Australia and Malaysia. Practical implications This paper provides empirical evidence that a unitary leadership pattern has no significant impact on companies in the Asia-Pacific, and it would be of interest to regulatory bodies, business practitioners and academic researchers. Originality/value This paper contributes to the literature on corporate governance and earnings management by introducing a framework for identifying and analyzing moderating variables that affect the relationship between the leadership structure and a firm’s financial reporting quality.

Female Leaders and Financial Inclusion. Evidence from Microfinance Institutions

This research advances the hypothesis that female leaders – chief executive officers (CEOs), chairs, and directors – of a microfinance institution (MFI) give more priority to the poorest families in loan provision than male leaders do. We differentiate between a depth and a width dimension of financial inclusion. The data set is a unique global panel of MFIs collected from MFI raters’ reports. Our sample is also unique in the sense that about one-third of all MFIs have a female CEO. The problem of endogeneity for the female leader is resolved by running Heckman’s two-step endogenous dummy variable estimation with an instrument for the female leader. We find evidence of greater depth financial inclusion (smaller average loans, more gender bias) with a female leader but not for width financial inclusion (credit client growth). Female leaders exhibit greater altruism and greater competition avoidance but not greater risk aversion than male peers.

The Stock Market Response to CEO Changes: Does Gender Matter?

During the past 40 years, women’s participation in the workforce has increased dramatically. However females have not made any recognizable gains when it comes to appointments as Chief Executive Officers (CEOs). In fact, the proportion of female CEOs heading publicly traded firms has stagnated at only 1.4%. This study analyzes the stock market response to both announcements and terminations of female CEOs. Most previous studies have been limited to the analysis of appointments only. Our results suggest that investor response to both appointments and terminations of female CEOs is not significantly different from that of male CEOs. The continued low proportion of female CEOs remains an enigma, and research investigating on other possible explanations for this phenomenon will have to be conducted. The cultural composition of the business landscape in the United States continues to evolve. We’ve moved toward parity among the sexes in many areas. However the participation rate of females at the top level of business organizations remains low. Studies show that as few as 1.4% of CEO’s in the Fortune 500 are females and a mere 13% of corporate board members are women (Laff, 2007). This disparity also exists globally, as only 29 of the Forbes 100 Most Powerful Women in the World are CEOs (Atal, Perlroth, Vardi, & Forbes, 2011). Shareholders seek to maximize their wealth. The theoretical underpinnings of finance suggest that boards of directors and investors should be rational in their decision-making in order to provide the highest possible success for the firm. Females comprise as much as 50% of the modern-day U.S. workforce. Thus, one might think that the proportion of female CEOs and Board members would be closer to 50%. Surprisingly very few studies examine investor perceptions of CEO gender. Those that do analyze CEO appointments only and not terminations of CEOs (for example, Lee & James, 2007; Martin, Nishikawa, & Williams, 2009). In addition, findings from a variety of studies (reviewed in the next section) suggest that females may possess traits that make them better CEOs. Yet, the proportion of female CEOs and board members continues to lag.

Female CEOs, Firm Performance, and Firm Development: Evidence from Thai Manufacturers

Even though there are a number of previous studies investigating the underperformance of female-led firms as compared to male-led ones, none have investigated the impact of women as heads of firms in terms of short-term performance (sales and profit) and long-term development (innovation and training). Using 1,043 manufacturing firms in Thailand as a case study of a developing country in which the proportion of women chief executive officers (CEOs) is the highest among the Southeast Asian countries, this article investigates the impact of female CEOs on both short-term performance and long-term firm development. Even though the number of women in the manufacturing sector is limited, women CEOs of Thai manufacturing companies are found to have a negative effect on both short-term financial performance indicators, including the annual sales and profits, as well as long-term development of firm indicators (product innovation, process innovation, and provision of employee training). However, this negative association of short-term financial performance is weaker in the case of women CEOs who have completed college. In addition, more experienced women CEOs are more likely to provide employee training. Promoting highly educated and experienced women in management positions as well as providing them with training should be a priority in order to enhance the short-term and long-term performances of their companies.

Are Women Better Bankers to the Poor? Evidence from Rural Microfinance Institutions

Microfinance Institutions (MFIs) provide financial services to the poor and in many ways resemble both banks and non‐profit organizations. Many MFIs target women because more women than men are poor, especially in rural areas. Studies show that women manage money differently from men and have different leadership styles. Thus, in credit unions and financial firms, female and male managers achieve different results. In microfinance, gender diversity on the board of MFIs is beneficial, and loans authorized by female loan officers have lower default rates. Motivated by these findings, we ask whether MFIs with a female Chief Executive Officer (CEO) are more efficient at serving the poor without jeopardizing financial sustainability. We adapt the banking approach to managerial (in)efficiency to account for the outreach and sustainability goals of the MFIs, and evaluate whether MFIs' outreach efficiency differs by the gender of their respective CEOs. We estimate a stochastic frontier cost function using the Battese‐Coelli (1995) model and the “true” random effects estimators using panel data from over 250 MFIs. We find that MFIs with female CEOs have significantly higher outreach efficiency than MFIs with male CEOs. Similar results are found with a two‐step stochastic frontier approach. Overall, the results suggest that promoting gender diversity at the top levels of MFI management is likely to have both social and financial benefits.

Are Female CEOs and Chairwomen More Conservative and Risk Averse? Evidence from the Banking Industry During the Financial Crisis

This paper examines whether bank capital ratios and default risk are associated with the gender of the bank’s Chief Executive Officer (CEO) and Chairperson of the board. Given the documented gender-based differences in conservatism and risk tolerance, we postulate that female CEOs and board Chairs should assess risks more conservatively, and thereby hold higher levels of equity capital and reduce the likelihood of bank failure during periods of market stress. Using a large panel of U.S. commercial banks, we document that banks with female CEOs hold more conservative levels of capital after controlling for the bank’s asset risk and other attributes. Furthermore, while neither CEO nor Chair gender is related to bank failure in general, we find strong evidence that smaller banks with female CEOs and board Chairs were less likely to fail during the financial crisis. Overall, our findings are consistent with the view that gender-based behavioral differences may affect corporate decisions.

Female leadership, performance, and governance in microfinance institutions

This paper investigates the relations between female leadership, firm performance, and corporate governance in a global panel of 329 Microfinance Institutions (MFIs) in 73 countries covering the years 1998–2008. The microfinance industry is particularly suited for studying the impact of female leadership on governance and performance because of its mission orientation, its entrepreneurial nature, diverse institutional conditions, and high percentage of female leaders. We find female leadership to be significantly associated with larger boards, younger firms, a non-commercial legal status, and more female clientele. Furthermore, we find that a female chief executive officer and a female chairman of the board are positively related to MFI performance, but this result is not driven by improved governance.

CEO compensation in China

Purpose – This study investigates the determinants of Chief Executive Officer (CEO) cash compensation in relation to corporate governance and performance in China's listed firms. This article also aims at analyzing gender earning differentials among CEOs. Design/methodology/approach – The empirical analysis is based on the panel data set which contains information on the CEOs of 1,701 firm-year observations over the period 2006-2010. A Oaxaca decomposition is also implemented to measure the gap between male and female CEO compensation. Findings – The paper observes that CEO compensation relies more on firm accounting performance than on stock market performance. This relationship is especially evident when accounting performance is measured as the return-on-assets. Dominant shareholders such as the state and block holders have a distinct impact on the use of incentive pay. The presence of a compensation committee in a Chinese listed firm is correlated with an excessive pay package for the Chief Executive Officer (CEO), even though there is evidence that pay-for-performance is more likely in the presence of a compensation committee. Furthermore, this context extends the international body of evidence on CEO compensation by offering a novel accounting of the gender gap in pay among China's listed firms. Examination of the dataset reveals that women represent approximately 6.8 percent of CEOs. In keeping with international norms, female CEOs are more senior and better educated than their male counterparts, yet they receive less favorable compensation. The Oaxaca decomposition shows a larger unexplained part of the pay-gap and suggests that the gender statistically explains a great deal of the gap in pay between male and female CEOs across China's listed firms. Originality/value – This article contributes to the international corporate governance literature and implications for the design of good corporate governance for China's listed firms. Moreover, this article also highlights the current gender gap among CEOs in compensation.

Incentive schemes and female leadership in financial firms

Our purpose is to explore how performance in Swedish financial companies is affected by the presence of a female chief executive officer (CEO), the presence of an incentive scheme, and the proportion of female board members. The results indicate that a female CEO is associated with a lower return on equity (ROE) and a lower Tobin’s Q, but we find no significant association between the proportion of female board members and firm performance. An incentive scheme is generally associated with a lower return on assets (ROA) and a higher Tobin’s Q. In particular, a share-based incentive scheme is associated with a lower ROA, a lower ROE, and a higher Tobin’s Q.

The Relationship Between CEO Gender, Financial Performance, And Financial Management

In recent years, the number of female Chief Executive Officers (CEOs) at large firms has increased to the point that it is possible to statistically compare the performance and management characteristics of firms managed by CEOs of different genders. This paper is an exploratory study that examines the relationship between CEO gender and the performance and management of publicly traded firms. We use a large dataset of annual Forbes CEO data, combined with Compustat data, covering the time period of 1997 to 2006. Our results show that CEO gender is related to a number of factors including inside ownership and return on assets.

Do Female CEOs and Chairs Constrain Bank Risk-Taking? Evidence from the Financial Crisis

This paper examines whether bank capital ratios and default risk are associated with the gender of the bank’s Chief Executive Officer (CEO) and Chairperson of the board. Given the documented gender-based differences in conservatism and risk tolerance, we postulate that female CEOs and board Chairs should assess risks more conservatively, and thereby hold higher levels of equity capital and reduce the likelihood of bank failure during periods of market stress. Using a large panel of U.S. commercial banks, we document that banks with female CEOs hold more conservative levels of capital after controlling for the bank’s asset risk and other attributes. Furthermore, while neither CEO nor Chair gender is related to bank failure in general, we find strong evidence that smaller banks with female CEOs and board Chairs were less likely to fail during the financial crisis. Overall, our findings are consistent with the view that gender-based behavioral differences may affect corporate decisions.

CEO and Chairperson characteristics and firm performance

This paper focuses on the relationship between Chief Executive Officer (CEO) and Chairperson characteristics and firm performance. Specifically, the study examines the association between the characteristics of the CEO and the Chairperson of the board and firm performance. Using a sample of S&P 500 firms, the evidence found suggests that demographic and experience-related characteristics may be associated with the market valuation and financial performance of the firm. In particular, the reported results indicate a positive relationship between the presence of female CEOs or Chairs and firm performance, thus suggesting that gender-based differences may affect the CEO’s/Chairperson’s success. Moreover, the findings concerning the age of the CEO or Chair are mixed, while their experience and quality appear positively related to firm performance. Interestingly, a CEO or Chairperson holding multiple board seats is negatively associated with firm performance, whereas CEO duality has a positive relationship with Tobin’s Q and the return on assets (ROA) of the firm.