Female CEOs are held to a higher standard than their male counterparts

Consumers are less likely to buy products from female-led organizations than they are from male-led organizations following an ethical failure, according to American Psychological Association research published in the Journal of Personality and Social Psychology.

Meanwhile, the extent to which consumers penalize female-led or male-led companies for a competence failure (such as a faulty product) varies depending on the industry.

Female-led companies are penalized less for competence failures, the authors found across three experiments — unless they occur in an industry in which a woman is expected to possess more expertise, like child products. Male-led companies are penalized more for competence failures in industries regarded as more stereotypically “male,” like automobiles.

What drives these disparities?

People tend to associate women with “communal” traits like likability, warmth and relatability, lead study author Nicole Votolato Montgomery, an associate professor of commerce at the University of Virginia, told MarketWatch.

In other words, a woman’s leadership of an organization makes consumers expect that the company will be more ethical, she said. It also gives them lower expectations of the company’s competence.

“I believe that you’re going to be a moral company because you have a female CEO,” Montgomery explained this thinking. ”But you know what? You may not be as competent.”

Female chief executives aren’t the only powerful women who appear to face harsher scrutiny for ethical issues. Montgomery and her co-author, UVA associate commerce professor Amanda Cowen, cite in their study an example from the 2016 presidential election: Despite documentation that then-candidate Donald Trump had made more false statements than rival Hillary Clinton, some polls showed that voters perceived him to be more trustworthy.

Women lead just 33 companies (6.6%) in the Fortune 500, and even that share is a record high. A related phenomenon known as the “glass cliff” — in which women are tapped to lead flailing companies back on course — has also been well documented, with the tenures of former Yahoo! CEOs Carol Bartz and Marissa Mayer frequently used as case studies.

Female CEOs can manage perceptions of themselves by cultivating what researchers called “agentic” male personality stereotypes, Montgomery said — presenting themselves as more ambitious, independent, skilled and adept at working under pressure. If women portray themselves as such, “the penalties are actually more in line with how male-led organizations are penalized,” she said.

Former PepsiCo PEP, +0.36%   CEO Indra Nooyi, who stepped down from her post in 2018, provided a lesson in this strategy, Montgomery said. “Indra Nooyi is a great example of somebody who has had success positioning herself as more agentic, and was able to manage activist campaigns against Pepsi and some other sorts of things that rose during her tenure there,” she said.

The ways in which the popular press and organizations themselves write and communicate about CEOs can also impact perceptions during a company failure, Montgomery suggested.

“Women who are written about as more independent [and] more skilled, as opposed to using more communal traits, like ‘She’s likable’ — that has implications for how consumers perceive these crises, and then their interaction with the companies,” Montgomery said.