Gender diversity in leadership succession: Preparing for the future

• DOI: http://doi.org/10.1002/hrm.21487
• Date: 01 July 2012
• Published date: 01 July 2012
• Author: Charles R. Greer,Meghna Virick

GENDER DIVERSITY IN

LEADERSHIP SUCCESSION:

PREPARING FOR THE FUTURE

MEGHNA VIRICK AND CHARLES R. GREER

The development of gender diversity in leadership positions is a critical need

for many companies as they develop strategies for how they will compete in

the future. In this article, we test hypotheses about diverse leadership suc-

cession, using survey and archival data. Survey data were collected from ex-

ecutives and managers who responded to questions about their succession

planning, successors, and the context of diversity in their work environments.

Results indicate that the nomination of women as successors was positively

associated with more favorable diversity climates for women. Furthermore,

we found that the nomination of female successors was positively associated

with the performance of incumbent managers who nominated them as their

successors. We also found that the performance of incumbent managers

moderated the relationship between diversity climate and the nomination

of female successors. Lower-performing incumbents were less lik ely than

higher-performing incumbents to nominate women as successors when the

diversity climate was unfavorable. When the diversity climate was favorable,

lower performers were more likely and higher performers were equally likely

to nominate women as successors. We found no differences in the degree of

objectivity in incumbents’ descriptions of the strengths of female successors

versus their male counterparts or in the degree of subjectivity in their devel-

opmental needs. © 2012 Wiley Periodicals, Inc.

Keywords: diversity, leadership, succession, succession planning

Introduction

T he development of future leaders is a

critical issue, requiring companies to

treat talent management as a strate-

gic rather than a tactical exercise.

Competition for talent and constant

change have highlighted the importance of

leadership at all organizational levels (Day,

Zaccaro, & Halpin, 2004) and is causing

organizations to identify candidates for fu-

ture leadership positions among groups that

have traditionally been overlooked—namely,

women and minorities. Industry leaders such

as PepsiCo, L’Oreal, and Allstate, which are

noted for cutting-edge diversity practices

(Crockett, 1999; Salz, 2005; Terhune, 2005),

Correspondence to: Meghna Virick, Department of Organization and Management, College of Business, San Jose

State University, San Jose, CA 95192, Phone: 408.924.3575, E-mail: m.virick@sjsu.edu

Human Resource Management,

Human Resource Management, July–August 2012, Vol. 51, No. 4. Pp. 575–600

© 2012 Wiley Periodicals, Inc.

Published online in Wiley Online Library (wileyonlinelibrary.com).

DOI:10.1002/hrm.21487

576 HUMAN RESOURCE MANAGEMENT, JULY–AUGUST 2012

Human Resource Management DOI:10.1002/hrm

By examining the

process by which

successors are

nominated, we

highlight a problem

faced by many

organizations that

wish to have greater

representation of

women in senior

ranks but find that

the pipeline shrinks

at higher levels

in the managerial

hierarchy.

have developed their diversity management

competencies into sources of strategic advan-

tage. Indeed, the strategic importance of di-

versity has been confirmed by studies that

have examined the relationship between di-

versity and firm-level outcomes. For example,

the interactions of greater cultural diversity

and growth strategies have been found to

have positive relationships with productivity,

return on equity, and perceptions of market

performance (Richard, 2000). Proxies for ef-

fective and ineffective management of diver-

sity practices, respectively, have also been

found to be positively and negatively related

to stock market responses (Wright, Ferris,

Hiller, & Kroll, 1995). Nonetheless, very few

studies have examined internal HR systems,

such as succession planning, which can play

a key role in the development and upward

mobility of a diverse workforce.

Succession planning, which involves

the identification and long-term develop-

ment of talent for key executive and pro-

fessional positions, can provide a vehicle

for the development of diverse

leadership talent pools (Conger

& Fulmer, 2003; Karaevli &

Hall, 2002). However, a diverse

employee base is a prerequisite

for such planning. Such plan-

ning is essential for promotion-

from-within approaches to talent

development, the benefit of

which can be seen at the high-

est levels in such indicators as

positive stock market reactions to

the promotion of heir-apparent

CEOs (Shen & Cannella, 2002)

and lower failure rates of newly

appointed CEOs (Zhang, 2008).

Several facets of succession sys-

tems have been found to be

related to company financial

performance, such as active

involvement of the CEO, fore-

casting talent needs, rewards

for development, and the “ear-

nestness” of performance evalu-

ation (Friedman, 1986). Often

conducted as an annual exer-

cise, succession planning can

be conducted as a mechanical obligation or

a thoughtful exercise aimed at developing

future leaders. A substantial proportion of

organizations now view succession planning

as a performance management and leader-

ship development process, with intentional

assignments in which successors develop

skills needed to perform the job (Day,

2001). Such planning is a basic building

block of leadership development, not only

at a domestic level, but also for the devel-

opment of global leaders in international

firms (Scullion & Starkey, 2000). Diversity

initiatives and succession planning have,

therefore, become crucial for organizational

competitiveness (Esen, 2005; Greller & Nee,

1989).

The focus of our inquiry involves the

question of how companies approach diver-

sity from an integrative perspective to ensure

the availability of a pipeline of diverse lead-

ership and professional talent (Greer &

Virick, 2008). In this article, we are inter-

ested in sex differences as they play out in

the actual succession planning exercise of

a company. There is substantial research

on the impediments to upward mobil-

ity, or glass-ceiling barriers, that women

face in their careers (Hoobler, Wayne, &

Lemmon, 2009; Lyness & Thompson, 2000).

For instance, there is evidence that women

tend to receive lower leadership evalua-

tions relative to men in some situations.

This is particularly reflective in leadership

roles characterized by masculine descrip-

tions and in roles where there is a numeri-

cal predominance of men (Eagly, Karau, &

Makhijani, 1995; Heilman & Eagly, 2008).

Such evaluations decrease the likelihood of

the promotion of women and their position

in leadership succession. An examination of

the succession-planning exercise of an orga-

nization may help us better understand why

so many companies, despite their best efforts

at recruiting women at the entry level, find

that women fail to move up the ranks into

leadership positions. By examining the pro-

cess by which successors are nominated, we

highlight a problem faced by many organi-

zations that wish to have greater representa-

tion of women in senior ranks but find that