Female CEOs judged more harshly than men for workplace failures, study finds

Female CEOs are more likely to be held accountable than their male counterparts for ethical workplace failures, according to a new study.

Researchers from the University of Virginia wanted to explore how, if at all, gender influences consumer perception of an organisation.

The team conducted a series of experiments in which consumers opinions were analysed after a company experienced either a competence failure, such as a product flaw, or an ethical failure, such as if the product flaw was known but not disclosed to the public.

“Our study found that consumers’ trust in, and willingness to support, an organisation after a failure varied based on the gender of the organisation’s leader and the type of incident,” said Nicole Votolato Montgomery, lead author of the study.

“Women incur greater penalties for ethical transgressions because of persistent gender stereotypes that tend to categorise women as having more communal traits than men, such as being more likeable, sensitive and supportive of others. Even in leadership settings, women are still expected to be more communal than their male counterparts.”

In the first experiment, 512 participants were asked to read a business news article about an auto manufacturer and then complete a survey about their intent to buy a vehicle from the company.

One-third of the participants read about an ethical failure, while one-third read about a competence failure and the final third only read the company description.

The participants were then asked how likely they were to purchase a car from the company the next time they were in the market for a vehicle and reported their trust in the organisation.

“When participants were told that the company had previously been made aware of a fuel sensor problem and failed to take immediate action, an ethical failure, they reported less intent to purchase from the company when the CEO was a woman than when the CEO was a man,” said Montgomery.

“However, when participants were told that the company was previously unaware of the product issue, a competence failure, they reported greater intent to buy the products when the CEO was a woman than when the CEO was a man.”

The purchase intentions for the group that read only the company description did not vary based on the CEO’s gender.

For the second experiment, the researchers altered how female and male CEOs were described, using traits that are stereotypically associated with females, such as “helpful” and “sensitive”, or traits that are stereotypically associated with males, including “skilled” and “independent”.

The 416 participants in this study read the same news article as in the previous experiment and completed the same survey questions about their buying intentions and trust in the company.

Similar to the previous experiment, when participants read about an ethical failure where the CEO was described using traits consistent with stereotypes participants were less likely to buy from the company led by the female CEO.

“When leaders are described in ways that reinforce stereotypes, we continue to find that people penalise female-led organisations more for ethical failures, but we can reduce these penalties for female-led organisations by highlighting traits of their leaders,” said co-author Amanda Cowen.

For the final experiment, Montgomery and Cowen explored whether consumers’ judgments would change if the female CEOs led businesses that operated in industries that are viewed as more stereotypically feminine, such as a company making children's products.

Participants indicated they would be less likely to purchase from a female-led organisation in both stereotypically male (automotive) and stereotypically female (child products) industries after an ethical failure, according to the researchers.

However, participants’ responses to competence failures differed depending on the industry.

“In the auto industry, which is typically viewed as more male, participants penalised female-led organisations less than male-led organisations for competence failures,” Cowan said.

“However, the opposite was true for a child products company. In that setting, participants who read about a competence failure penalised female-led organisations more than male-led organisations. This further demonstrates how gender stereotypes influence our expectations of leaders and their organisations.”

Montgomery and Cowen believe their findings may have implications for leaders’ career outcomes.

“Organisational performance affects how leaders are evaluated, how they are compensated and ultimately, whether they retain their positions,” Montgomery said.

“Our research suggests that when ethical failures occur, female leaders may aid their organisations’ recovery efforts by exhibiting traits that are more consistent with male stereotypes.”

The study was published in the Journal of Personality and Social Psychology.