Female CEO leadership and the likelihood of corporate diversity misconduct: Evidence from S&P 500 firms

Large-scale discrimination lawsuits-as major types of corporate diversity misconduct-pose significant challenges for the reputation and financial well-being of firms. This study explores the role female CEOs play in reducing the likelihood of such lawsuits. Drawing from social role theory, we propos...

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Bibliographic Details
Published in:Journal of business research 2020-09, Vol.118, p.398-405
Main Authors: Dadanlar, Hazel H., Abebe, Michael A.
Format: Article
Language:English
Subjects:
Business schools
Chief executive officers
Discrimination
Discrimination lawsuits
Diversity misconduct
Female CEOs
Leadership
Social role theory
Strategic leadership
Women executives
Workplace multiculturalism
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Summary:Large-scale discrimination lawsuits-as major types of corporate diversity misconduct-pose significant challenges for the reputation and financial well-being of firms. This study explores the role female CEOs play in reducing the likelihood of such lawsuits. Drawing from social role theory, we propose that female CEOs, given their high-profile position, past career experiences and general sensitivity to diversity misconduct, play a critical role in minimizing the occurrences of discrimination lawsuits. We tested our predictions using a panel data from S&P 500 U.S. firms between 2010 and 2015. The findings indicate that firms that are led by female CEOs have a reduced likelihood of discrimination lawsuits. Furthermore, female CEOs can be particularly effective in reducing such lawsuits in firms with more frequent past diversity misconduct. Finally, our findings show that female CEO-led firms with favorable diversity ratings experience reduced likelihood of large-scale discrimination lawsuits. Implications for research and practice are discussed.
ISSN:0148-2963
1873-7978
DOI:10.1016/j.jbusres.2020.07.011