Recent research from Columbia Business School showed that inclusivity was typically well rewarded during earnings calls. The study finds that the combination of improved employee retention and diversity results in improved corporate performance, but they also find that encouraging employees to speak up on earnings calls can also be hugely powerful.
This is because those kinds of managers will also encourage employee voice and other positive things in other aspects of their work, which in turn boosts performance. This general inclusivity does not extend to female managers, however, as research from the University of Exeter shows that female bosses face tougher questions than their male peers.
Unequal treatment
The researchers analyzed nearly 40,000 earnings calls with American firms from 2005 to 2018, with the calls giving investors and analysts the chance to grill firms about their overall financial performance. They found that male analysts commonly gave female CEOs a much tougher time than female CEOs. Indeed, the study found that questions to female bosses were around 8% more aggressive than those to male bosses.
The study also found that questions from male analysts were typically more aggressive than those from female analysts. This aggression was gauged across four measures, including the frequency of follow-up questions, the number of direct questions, and questions that begin with assertions.
This general aggressiveness appeared to be strongly linked with career progression for analysts, however, with those who adopted a more aggressive stance were more likely to be selected for industry programs to identify the best analysts.
An out-group
Of course, the overwhelming majority of both CEOs and analysts are male, which presents a very clear gender-based outgroup that can create significant bias, with preferential treatment given to fellow men that are not afforded to either female bosses or analysts.
The study builds on previous work showing how biased earnings calls can often be, with male analysts frequently making lower earnings forecasts for companies with female bosses, with women also viewed as being less knowledgeable than men. It’s an issue with real consequences on both an individual and collective front.
“Differences in male and female linguistic styles have potential implications for who gets credit for work and for judgments of confidence and competence,” the researchers say. “Linguistic styles also affect how men and women are viewed in the power hierarchy and how criticism is perceived. Given our findings, sell-side firms might want to ensure that their managers are aware of the differences between the linguistic styles of men and women.”
