Women CEOs hit ‘green ceiling’ when attracting investors, study says
Wednesday, May 9, 2012
When it comes to a company’s critical stock market debut, investors are
less likely to trust their money to an enterprise led by a female CEO, a
University of Utah researcher reports.
top-level female executives seems entrenched despite strides women generally
have made in filling management positions within firms making their initial
public offerings,” according Lyda Bigelow, an assistant professor at the
university’s David Eccles School of Business, co-author of "Skirting the
Issues: Evidence of Gender Bias in IPO Prospectus Evaluations.”
The study enlisted
222 second-year MBA candidates -- 45 of them females -- to assess real IPOs forinvestors.
The students also considered an IPO by a fictitious cosmetic surgery firm modeled
using financial data from a real company’s successful entry into the stock
market. Keeping the IPO financial and industry information identical, the
researchers varied the gender distribution of the bogus company’s top
management team: first names were changed, from Matthew to Martha, for example,
as were executive photos in IPO pitch materials the students reviewed.
personal qualifications and firm financials, female founders and CEOs were
perceived as less capable than their male counterparts, and IPOs led by female
founders and CEOs were considered less attractive investments,” Bigelow said.
The apparent reluctance
to invest in IPOs spearheaded by women exists even though nearly half of all
privately held U.S. businesses are owned or led by women. Statistics also
indicate that between 1997 and 2007, women holding corporate officer positions grew
from 10 percent to 55 percent. In 2009, however, not one of 19 high-tech IPOs Bigelow
and her co-researchers studied was led by a female CEO, though all but two of those
firms had one or more lower-ranking female executives.
The lack of
female-led initial public offerings suggests a potentially larger problem – a
gender-based capital gap for new ventures, Bigelow said. "Like the glass
ceiling of corporate America that has limited the advancement of female
managers, female entrepreneurs face a ‘green ceiling’ when it comes to
financing. Taken as a whole, our results suggest that gender stereotypes are
alive and well and, moreover, that such stereotypes impact investment