Researchers have been examining barriers and challenges for women in leadership positions from a variety of perspectives since 1979 when the phrase "the glass ceiling" was first used. More recently, some researchers have found evidence of another phenomenon coined the "glass cliff" (Ryan & Haslam, 2005). The glass cliff suggests that females are more likely than males to hold or be appointed to senior positions in organizations that are in crisis. These positions are considered to be "precarious," and, therefore, are associated with a greater risk of failure.
Although Ryan and Haslam (2005, 2007) make a persuasive case to support their view of a glass cliff, the empirical support for such a conclusion is not yet rich or compelling; there is simply an insufficient body of evidence available. In fact, some researchers testing for the phenomenon have produced counter results (Adams, Gupta, and Leeth, 2009). In addition, the concept that women are breaking through cracks in the glass ceiling only to be placed on "glass cliffs" with significant barriers to success has drawn attention from the popular press. These practitioner-oriented stories have given the concept significant exposure, but the support for such a conclusion appears to be lacking. While it seems apparent that women are seriously under-represented in executive positions around the globe (1) this, in itself, does not mean there is a glass cliff. While the suggestion of a glass cliff has gained some following in the popular press, empirical testing and support for the concept lags.
There are two purpose of this study. First, this research seeks evidence of the glass cliff using data from Canada. Much of the research completed to date uses US or UK data, so results from another country will help in determining if the phenomenon exists. This will be accomplished by evaluating the impact of the appointment of women to Canadian boards using security return performance for 25-months around the board appointment. For publicly-traded companies, security returns capture the market's view of company performance. Second, this study aims to extend the analysis by using excess as well as raw return data for 25 months around the date of the board appointment. Some studies only use raw security returns; excess returns are more informative because they remove the basic market movement from the analysis and provide a more sensitive test for market reaction to a company-specific event. The remainder of this paper is organized as follows. Section 2 provides a review of the relevant literature, while Section 3 describes the methodology. Section 4 provides the results, and the final section discusses the limitations of the study, considers future research directions, and concludes the paper.
LITERATURE REVIEW: FROM THE GLASS CEILING TO THE GLASS CLIFF
There has been a great deal of discussion about and investigation into the barriers facing women as they try to climb the corporate ladder and break the "glass ceiling" (Oakley, 2000; Alimo-Metcalfe, 1995; Ragins et al., 1998; Tannen, 1994; and, Kanter, 1977). The term "glass ceiling" was first coined in 1979 by Katherine Lawrence and Marianne Schreiber of Hewlett-Packard. They described a situation where female managers attained a management level that they were not able to rise above, even though there seemed to be a clear path for promotion. This reality may be associated with women's perceived status as "tokens" (Kanter, 1977) in senior management positions, and not part of the "club."
Limiting the advancement of a qualified person within an organization creates a glass ceiling that may be due to some form of discrimination. For an organization with a glass ceiling, a visible group (women) are advanced through the ranks to a certain management level, after which there is an effective limit on their prospects (Albrecht et al., 2003). This concept has become a well accepted explanation for the paucity of women in the upper echelons of organizations. In addition, despite years of research and debate about this reality, progress for women breaking through the glass ceiling continues to be incremental.
The most common explanations offered as to why employers may discriminate against females include organizational norms such as "the old boys club," the belief that women are "too emotional" to handle certain positions, and discrimination based on embedded stereotypes about females (Reskin & McBrier, 2000). Other explanations for the lack of advancement and precarious nature of assignments can be found in social capital theory. For example, Kurma & Vinnicombe (2010) propose that social capital is necessary for organizational career advancement and it is more difficult for females to accumulate social capital. Acker's (1998) work on organizational gendering processes suggests that many organizations have a "masculine culture" presenting an additional hurdle for female advancement.
Origins of the Glass Cliff
Judge (2003) sparked interest in the study of the impact female corporate leaders were having on their organizations. Judge argued that female leaders had "wreaked havoc" on the performance of Britain's largest companies, and that companies with all male boards tended to perform better than those with females on the board. Her conclusions were based on a simple analysis of the board membership of the FTSE 100 companies (2) with the best and worst stock market performance in 2003. Companies without female board members performed better leading to her conclusion that "corporate Britain may be better off without women on the board."
In response to this story, Ryan and Haslam (2005) undertook a study of FTSE 100 companies in order to explore the relationship between board appointments and company performance. Contrary to Judge's claim, they proposed that poor company performance may precipitate the appointment of female leaders. In effect, they found that females tended to be appointed to leadership positions when company performance was poor. Ryan and Haslam (2005) dubbed this finding the "glass cliff' and argued that females were appointed to senior management or the board when the positions were more precarious and dangerous.
The theory of the "glass cliff' draws on the precarious work literature. While traditional definitions of precarious work highlight low pay, few benefits, and modest security (Vosko, 2000), current thinking has broadened the view to include work that is too difficult, dangerous, and dirty, and with delayed compensation (Lwechuk, Clarke & deWolff, 2011). As such, accepting a senior management or board appointment from a company in chaos or experiencing poor financial performance may be considered a precarious position. It likely means that the work ahead will be more difficult and less desirable than a similar appointment to a firm in good financial health. (3) In addition, if company performance further deteriorates or cannot be improved, the appointee is putting their reputation and career at risk. Finally, it is more difficult for females to obtain senior management or board appointments, thus compensation is denied or delayed, and generally reduced over the individuals working life.
Essentially, the glass cliff refers to appointments or positions that are precarious (or dangerous) for one or a combination of four reasons: the leaders of companies in poor financial health are more likely to be criticized (Ryan & Haslam, 2009); these leaders are more likely to be targets of unfair blame or censure; they are often either pushed out of office or feel compelled to "take the fall" on behalf of their organization (Ryan & Haslam, 2007, p. 557); and the blame for poor company performance tends to focus on the abilities of leaders rather than the organization. Precarious leadership positions increase the probability of negative publicity and failure (Lee & James, 2007).
Gender stratification theory suggests that women are more often offered positions that are less lucrative, less secure, or ultimately precarious (Blau, 1972). The Catalyst survey (2011) of MBA alumni perhaps highlights the precariousness of female leaders' positions relative to men by revealing that, from 1996 to 2007, senior female leaders were more than three times (19% vs. 6%) as likely to have lost their jobs due to downsizing or closure. Overall, theoretical and empirical support for the limits on female advancement in organizations ("the glass ceiling") is plentiful and helps to support the theory of a glass cliff. However, direct empirical support for the glass cliff is preliminary.
Evidence of the Glass Cliff
In their seminal work, Ryan and Haslam (2005) argue that while women are now achieving more high profile positions, they are more likely than men to find themselves in positions that are risky or precarious. Ryan and Haslam tested this hypothesis by exploring the performance of FTSE 100 companies before and after the appointment of a board member, both male and female. Their study was based on 37 U.K. companies that appointed 15 females and 16 males to the board in 2003. The measure was the change in monthly share price (the raw security return) for 5 months prior to appointment and 3 months post appointment. An analysis of the monthly company performance was conducted and a significant effect was found. The study revealed that "during a period of overall stock-market decline, those companies that appointed women to their boards were more likely to have experienced consistently bad performance in the preceding five months than those who appointed men." (p. 81).
Ryan and Haslam continued their examination of the dynamics surrounding the glass cliff by identifying the various practices that may contribute to the glass cliff. They argued that "the glass cliff constitutes an additional barrier to female...