Women make up a small percentage of corporate leadership, but studies show their presence positively impacts a corporation’s performance. In the same vein, female CEOs exhibit superior success when measured against their male counterparts.

Sonal Kumar, Ph.D., assistant professor of Finance at Bryant University, applauds an extension of opportunities to women. However, she is troubled by how that strategy has been underpinned by unsubstantiated concepts — ones disputed by psychological research on male/female performance and that comes with hidden costs.

“There is an idea in finance over the past 10 to 15 years, one that seemed to be supported by a lot of research, that bluntly stated that women are inherently better than men,” she notes.

Kumar and collaborators from Concordia University wondered: What if the contention that female business leaders are naturally superior performers was fueling a distracting narrative about gender differences that masked an underlying problem of discrimination? If it wasn’t initial conditions that led to the difference, the team wondered, what if it was the path reaching the top?

A thousand cuts
This question fueled her research into the realities of how gender and race affect CEO performance. The recent study, “When distinction disguises discrimination: A look at female and non-white CEO performance,” is the culmination of a longtime investigation into an issue that has implications for the highest levels of power in America.

The well-known phenomenon of the “glass ceiling,” which sees women and people of color face barriers to their advancement — including a lack of access to informal networks that provide career advancement opportunities, gender stereotypes, and an “old boys club” that prefers to promote their own — provides a gauntlet of struggles to overcome. Kumar's research suggests that women — particularly women of color — who break through the C-suite glass ceiling must overcome a gauntlet of cuts along the way.

As women themselves, Kumar notes, her group of researchers had seen those challenges firsthand, and the effects they can have. “You need to have a very thick skin to ignore all the discrimination and all the negative talk around you,” says Kumar. “Someone often does not want you to succeed or even just wants you out. You need to have the willingness in you to keep going and to always prove yourself.

“When you are in that fight, you have no other option but to fight,” she suggests. “All you are able to do is keep going.”

Understanding differences
To test their theory, Kumar’s team evaluated a swath of American CEOs by breaking them down into four groups: Caucasian males, non-white males, white females, and non-white females. “If discrimination is driving these results, then the more discrimination a person faces, the better they should perform,” says Kumar.

“In a sense, we are comparing extraordinary women with average white males.”

Their findings support the idea that as each group faced increased discrimination, the members of the group that withstood the most were among the highest performers. Using Return on Assets and Tobin’s Q, which measures whether a firm or an aggregate market is relatively over- or undervalued, as metrics, they found that when stratified by both gender and ethnicity, the female CEOs of color — who are subject to both gender and racial discrimination — emerged as the best performers, followed by white female CEOs and then men CEOs of color. White male CEOs, who faced the least discrimination, were among the worst performers.

“That order seems to tell us: The more discrimination and scrutiny you face, the more you are required to be more capable to reach that position,” suggests Kumar. When we compare male and female CEOs, she says, “In a sense, we are comparing extraordinary women with average white males.”

Kumar presented the study in August at the Academy of Management Annual Conference in Boston, where it was selected as the best paper in the DEI category and published in the Academy of Management 2023 Proceedings. But she notes that it is difficult to overturn conventional wisdom, especially when new information reveals a troubling truth.

Deconstructing that narrative of female supremacy is vitally important to addressing inequity within the corporate power structure — and to ensure that female and non-white students are aware of the struggle ahead of them, she says.

“When I tell my female students about this research, I tell them it is not fun to hear, but at least now they know they have to fight back.”