Account for the ‘Ethics Tax’ on Female Leaders

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The arc of history has been moving, albeit in fits and starts, toward gender equality. In the business world, and a little less in the legal world, we see more female leaders at the top. But once a woman reaches that point, is she held to the same standards? Would a jury, for example, evaluate a female-led corporation on the same terms as it would evaluate a male-led corporation? Consciously, we would like to think so, but even as society changes, some deeply embedded assumptions and biases are likely to persist.

A recent study appears to confirm that. Researchers from the University of Virginia (Montgomery & Cowen, 2019) conducted three studies looking at the ways citizens evaluate fact patterns having to do with various forms of company failure. Keeping the facts the same but varying the gender of the CEO, the researchers found that female CEO’s are judged more harshly than male CEO’s when a business is viewed as acting unethically. Summarized in a release by Research Digest, the study also found a flip-side to that bias: When the company’s failure came down to competence rather than ethics, the female leader was judged less harshly. In other words, female leaders seem to be expected to be more ethical, but not as competent. In this post, I will consider a few implications of this in the context of evaluating company leaders of both genders.

Embrace Ethics

If female leaders have this ethics tax, or are punished more for a perceived lack of ethics, that may be due to assumptions about the values associated with the female gender. The study authors note popular assumptions that women should have more communal values – values like being “helpful,” “sensitive,” and “good at listening” — that relate more to ethics. For companies looking at their image in a litigation context, it makes sense to embrace ethics, particularly if the company is associated with a female leader but also if it has male or mixed leadership.

We have long observed that while the law expects parties to do the legal thing, jurors will often expect parties to do both the legal and the right thing. We ask this question in most of our research projects, and roughly one-third of mock jurors say that they would prioritize ethics over the law when the two conflict. And adding some greater nuance for both the other two-thirds of jurors and judges as well, their view of what “the legal thing” means is inevitably colored by their view of what “the right thing” is. Even for those who believe that they are prioritizing the law over ethics, it helps greatly if the party is able to show that they were guided both by what is legal and by what is ethical.

Demonstrate Competence

By the same token, if male leaders are punished more for a lack of competence, that may also be due to assumptions about the values associated with the male gender, and the tendency to associate men with more individualistic traits – traits like “independence” and “working well under pressure” — that relate more to competence. But when companies are led by members of either gender, it is important to show competence because that is one of the key components of credibility. The need to show competence is a reason why all parties, plaintiffs and defendants alike, need to not only meet their burdens and respond to the other side, but also need to present a positive case showing that “We did well within our own sphere of knowledge and responsibility.”

Continue to Work for Equality

Of course, at this stage, it shouldn’t matter whether a company is led by a male or a female, but, along with many other aspects of corporate image, it still does. Recognizing these implicit biases doesn’t move us backwards, but in public corporate communications and in courtroom corporate litigation, it is important to keep moving forward. In promoting credibility, that means emphasizing individual character over gender.

It also makes sense to think about the traits that you want associated with your company or its leader. Interestingly, in the second of the experiments the researchers ran, they found that in the scenario descriptions, the traits seemed to matter more than gender itself. As Research Digest describes it, “When participants read about an ethical failure where the CEO’s traits were congruent with stereotypes — women as helpful, men as strong, for example — results from the first experiment held: intent to buy from the female-led company was lower. But this changed when the stereotypes were inconsistent with the CEO’s gender: participants were less likely to buy from an organization led by a man described as ‘helpful’ and ‘sensitive’ than one led by an ‘independent’ and ‘strong’ woman.”

What this suggests that it is the perceived traits that matter most, and what a leader conveys through her or his own communications, or through their testimony, is going to be key. In the absence of a clear picture, people might implicitly default to crude gender stereotypes, but if they get a chance to learn about the person, then it is those perceived personal traits that will matter most. So the bottom line boils down to a central truth: Be careful and purposeful about what you communicate.

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Montgomery, N. V., & Cowen, A. P. (2019). How leader gender influences external audience response to organizational failures. Journal of personality and social psychology.

Image credit: 123rf.com, used under license

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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