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.
Dadanlar, Hazel H. and Abebe, Michael A., "Female CEO Leadership and the Likelihood of Corporate Diversity Misconduct: Evidence from S&P 500 Firms" (2020). Management Faculty Publications and Presentations. 15.
Journal of Business Research