Last weekend, I spent a good hour reading about the five UK Conservative party politicians tipped to replace their troubled leader, Rishi Sunak.
The front-runners vary, depending on whether you look at a betting agency such as Ladbrokes, or the favourites of veteran Westminster political commentators.
But three names keep standing out: Kemi Badenoch, Penny Mordaunt and Suella Braverman.
All are women, which raises a question I have not thought about in a long time. Nearly 20 years after the so-called glass cliff was first identified, is the problem just as bad as ever? There are signs it is, which says a lot about one of the most exasperating and curious theories of modern corporate life.
The glass cliff describes the way women are deemed more likely to break through the glass ceiling and rise to a top job when things are dire, the risk of failure is high and men are less interested in the gig. Exhibit one: running the UK’s splintered, fractious and unpopular Conservative party.
But the term originally grew out of the business world, in a way that is instructive for any financial journalist.
Women tended to be appointed at companies that had already been performing poorly, leaving the new leader to teeter on what the researchers called a glass cliff
In 2003, The Times in London ran a report on the front of its business section that questioned the wisdom of putting women on boards. It said the share price performance of big UK firms “that decline to embrace political correctness by installing women on the board” was better than “those that actively promote sexual equality at the very top”.
The article spurred two social scientists at the University of Exeter, Michelle Ryan and Alexander Haslam, to take a closer look at the data.
Their 2005 study told a different story: women tended to be appointed at companies that had already been performing poorly, leaving the new leader to teeter on what the researchers called a glass cliff.
Other academics detected the cliff in politics and the law. Some found it also applied to racial and ethnic minority CEOs.
But in 2024, surely there must be signs the problem is fading? Not according to Ryan and Haslam.
“We recently completed an analysis of all the studies conducted on the glass cliff and there is no evidence that the phenomenon is slowing down,” Ryan told me last week. “Indeed we can see a number of high profile examples of glass cliff appointments at the moment.”
She has a point. When Linda Yaccarino was made chief executive of X last year, she took on a company with a gutted workforce, plunging US advertising revenues and an erratic owner, Elon Musk, who had tweeted he was seeking a chief executive “foolish enough to take the job”.
In Australia, Vanessa Hudson recently became the first female chief executive of Qantas as the airline reeled from a series of controversies.
Why did Bank of Ireland shares plummet despite record profits?
In the UK, women have been appointed to a series of top jobs in a debt-laden water sector facing scathing criticism for sewage spills and rising charges.
Yet the UK also shows the glass cliff need not equal career death. When Kate Swann became chief executive of the WHSmith group in 2003, the retailer was deemed a fading underperformer encircled by dangerous competitors.
Swann was soon being lauded as a “turnaround artist” who revived the firm’s performance. She stayed there a decade and went on to run SSP, the food retailer where, in 2018, the share price fell by 7 per cent after she revealed her plans to step down.
Women running tricky companies need enough time in the job to do what is needed — which they often don’t get
Swann’s story underlines a central theme in The Glass Cliff, a new book that looks at how to tackle the problem.
Its author, former Netflix manager Sophie Williams, argues women running tricky companies need enough time in the job to do what is needed — which they often don’t get. Indeed, recent figures show female chief executives at Fortune 500 companies stay an average of 4½ years compared with 7.2 years for men, a gap that has barely narrowed since 2014.
All this casts a sobering light on some good news that emerged last week. Women now hold a record 42 per cent of board seats in the UK’s biggest listed companies, the government-backed FTSE Women Leaders Review reported.
The review’s chief executive, Denise Wilson, says this suggests the glass cliff problem might have receded, up to a point. Female leaders are still subjected to a level of “hyper-scrutiny” that men rarely face, she told me. “So you end up with the same sort of problem as the glass cliff.”
Happy International Women’s Day. — Copyright The Financial Times Limited 2024
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