Dr Michelle RyanThe glass cliff is a program of research at the University of Exeter investigating the context in which women and other minorities are appointed into leadership positions. This research suggests that women tend to be appointed to leadership positions under very different circumstances than men. More specifically, this research suggests that women are more likely to be appointed to leadership positions that are associated with an increased risk of criticism and failure. Women's leadership positions can thus be seen as more precarious than those of men. Extending the metaphor of the 'glass ceiling' and the 'glass elevator', Exeter researchers have dubbed this phenomenon 'the glass cliff'.

In an important study, published in the British Journal of Management, Exeter researchers discovered that companies with female board members fare worse on the stock market, despite performing as well on all other measures as those with all-male boards. The research suggests that shareholders respond negatively to women being appointed to their boards, causing share values to decline. This is consistent with other recent research that has examined responses to the appointment of female CEOs in the United States.

The team from the University of Exeter's department of Psychology and its Business School conducted a comprehensive analysis of performance data from all FTSE 100 companies between 2001 and 2005. This found that companies with all-male boards had a market valuation equivalent to 166% of their book value, while companies with at least one female board member had a market value equal to just 121% of book value.

However, the research also showed that appointing a woman to a company board does not compromise objective measures of financial performance, specifically, Return on Assets and Return on Equity. In fact, within the data set as a whole there was evidence that companies with women on their board were a far better investment than those without.

This suggests that shareholders systematically over-value companies will all-male boards, while being unenthusiastic about the appointment of women to senior positions. This is despite there being no evidence that women's appointment has an adverse impact on company's performance.

The findings also fit with previous research from the University of Exeter which has shown that women are appointed to leadership positions when a company is in crisis. Dubbed the 'glass cliff' phenomenon, this trend involves women being placed in precarious positions when there is a high risk of failure. This has led to women being associated with weak performance.

Lead author Professor Alex Haslam, a psychologist at the University of Exeter who developed the 'glass cliff' theory with his Exeter colleague Dr Michelle Ryan, said: "Our study shows very clearly that shareholders tend to devalue companies with women board members and to chronically over-value those with all-male boards. What is not clear is whether this is because shareholders feel that women perform less well on boards than men or whether they see a woman's appointment as a signal that the company is in crisis. Whatever the reason, it is clear that this response is unwarranted, because there is no objective evidence that having female board members damages a company's performance. If anything, the opposite is true."

Dr Michelle Ryan of the University of Exeter's School of Psychology, who has published her research in the March 2010 issue of the journal Psychology of Women Quarterly, proposes that this scenario of 'the glass cliff' extends to the political arena.

During the UK 2005 general election, the seats Conservative party female candidates were vying for were much less winnable than those that Conservative men were running in. As a result Conservative women performed much more poorly than their male counterparts. In contrast, for Labour party candidates there was no gender difference, reflecting the success of equal opportunity initiatives.

The reasons behind voter behaviour and business appointments are difficult to pinpoint and controversial. Ryan suggests that at the root of the issue is the perception that women are less suited to leadership positions than men, despite evidence that women are beginning to break through "the glass ceiling".

In the EU women make up just over ten percent of the top executive positions in the top fifty publicly quoted companies, and in the US female leaders occupy less than sixteen percent of these positions in the Fortune 500. As women continue to be underrepresented in politics and business, this stereotype is often reinforced and self-perpetuating. Dr Ryan says, "Gender discrimination in politics can be subtle and difficult to identify. Women continue to be under-represented in political office and often face a more difficult political task than men."