A research study conducted by Duke University looking at the sex of the CEO and other top leaders in an attempt to explain the presence of female executives in Fortune 500 firms found that where there was minimal correlation in the company’s sector, no correlation in the company’s size, there was a high correlation if the company had been involved in a scandal or was financially unstable. Instability was defined as “particularly poor or declining stock performance, an obligatory restatement of financial earnings, scandal, fraud, large layoffs or restructurings, mergers or acquisitions.”
“Ryan and Haslam (2005, 2008) theorize that unstable environments provide an opportunity forwomen to attain leadership positions because the risk of failure is higher. This has been referred to as a “glass cliff” because women, rather than men, are put in precarious and high-risk leadership positions. Ryan and Haslam (2005, 2008) provide observational (from large firms) and experimental evidence (with business graduate students) that demonstrates a greater likelihood of selecting a female leader when firm performance has been declining….in the wake of a scandal, the corporate social responsibility of a firm may be called into question. As a response, female executives may be installed strategically to signal that firms are attempting to become more “socially responsible.”
Hmmmm….One has to wonder what this could mean for the search committee at Best Buy that is seeking a new CEO. Given the recent scandal and the need to both right the ship financially and socially, will that bastion of dudeness which is Best Buy actually install a female CEO