Many people think women CEOs play it safe more than men. Some studies even claim that women leaders are less likely to make big business deals.
But new research from the Alberta School of Business says that’s not true. The study finds that while female CEOs of big companies usually make fewer big business deals than men, this difference disappears when they’re closely watched.
“We show that in high-scrutiny contexts—in the form of dynamic industry conditions, intense media coverage or high board power relative to the CEO—the difference between male and female CEO acquisition activity disappears,” the authors explain. “In contrast, when these forms of scrutiny are low, the difference between male and female CEOs’ acquisition activity is exaggerated.”
In the spotlight
The study discovered that when women CEOs aren’t closely observed, they tend to process information differently than men. They engage in more detailed and effortful consideration of available data.
The researchers analyzed over 10,000 observations from about 1,700 companies, focusing on the number and dollar amounts of acquisitions. Hannigan, who worked with the team at the Oxford Centre for Corporate Reputation, used an AI-generated data platform named RavenPack to examine media coverage of female CEOs.
The findings indicated that even though all top leadership roles face high scrutiny, the spotlight might affect women differently.
Greater freedom
When women CEOs face less scrutiny and have the time and mental space to thoroughly think about acquisitions, they tend to find reasons to either reject or proceed more cautiously. However, as the level of scrutiny increases, they shift towards evaluation processes more akin to those of male CEOs, moving closer to the usual norm.
“Context and situation matter. The essentialist argument (that women are born with certain characteristics) does not hold up,” the authors explain. “It’s not an adequate explanation of behavior. Scrutiny as a contextual factor is necessary to better understand female CEOs’ actions.”
Simply looking at a CEO’s gender alone doesn’t give the full picture of high-level decision-making. Saying women are naturally conservative isn’t very useful. The fact that their behavior changes based on circumstances shows how dynamic female CEOs are in their actions.
