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New Research Shows What Happens to Top Management Teams After Women Are Appointed to Them

Corrine Post smiles into a camera against a blue background.
Corinne Post, PhD, Fred J. Springer Endowed Chair in Business Leadership

What changes after women enter the upper echelon teams of business organizations? As it turns out, quite a lot, according to new research from Corinne Post, PhD, Fred J. Springer Endowed Chair in Business Leadership and professor of Management at the Villanova School of Business, and her collaborators Boris Lokshin at Maastricht University in the Netherlands and Christophe Boone at the University of Antwerp in Belgium.

Post and her colleagues theorized that women appointed to upper management positions bring unique knowledge, contribute distinct perspectives, and foster team dynamics that shift ways of thinking in the C-suite, which in turn leads to different strategic renewal choices. Defined as the process, content, and outcome of refreshment or replacement of attributes of an organization that has the potential to substantially affect its long-term prospects, strategic renewal choices in this setting follow shifts in TMTs’ ways of thinking that occur after women join upper management.

And their theories are correct. In the year following a woman's entry into the TMT, there is a change in how the TMT thinks: their willingness to take risks declines by about 13.5 percent, and their openness to change increases by about 10 percent, on average. These numbers are even higher when a woman is appointed to a TMT that already includes women, indicating that female TMT appointments reshape innovation-oriented renewal strategies, especially when the TMT includes female incumbents. Post and her colleagues focused on M&A and R&D as a measure of shifts in renewal strategy because they epitomize TMT-level strategic decisions.

“People often confound risk with innovation. We find that after adding women, firms still pursue innovation, but with more measured risks,” Post says.

Additionally, Post and her colleagues provide unique insight into why female appointments influence firm outcomes. Their study suggests that no changes in TMT thinking occur after a male is appointed to a TMT position. Changes occur due to shifts in TMTs’ ways of thinking, which links female (and not male) TMT appointments with strategic change, presumably because of the values they bring (stereotypically or not) and because of the dynamics that unfold when groups diversify. Firms with diversified TMTs that experience these shifts in thinking go from a buying (M&A) to a building (R&D) approach to innovation.

The unique life experiences women have influence their path to the TMT. Post and her colleagues theorized that female executives are aware that they have lower perceived status and thus they more carefully weigh risks (and favor less risky gambles). Women understand that they are under heightened scrutiny and that one misstep may associate them with lesser competence. Thus, career derailment. Increasing evidence suggests that women develop strategies to balance assertiveness and acquiescence in leadership roles to navigate the complicated expectations of female leaders.

“To prove themselves worthy of promotions to the highest corporate levels, women need to walk a difficult tightrope. They learn to stand out by promoting visionary and novel strategies to counter stereotypes,” Post added. “At the same time, they cannot afford to make any mistakes, because of the high career derailment price that comes with token-based hyper-visibility. Women in top management teams learn to carefully weigh the risks of their innovative strategies. It appears, their thinking may sway the elite groups that they join.”

Post and her co-authors analyzed a sample of 163 multinational firms from 1998 to 2012, headquartered in 20 countries and representing multiple industries, allowing for wide generalization of their findings. All the firms were involved in strategic innovation actions (M&A and R&D). From that sample, researchers identified 2,771 appointments into top management teams, of which 276 (10 percent) were female appointments.

The study appeared in the February 2022 issue of the Academy of Management Journal.