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How are women's career prospects impacted by organizational decline? A sizeable body of work suggests that organizations appoint women to leadership positions as a turnaround strategy during periods of organizational decline, a phenomenon known as the glass cliff. However, evidence for this phenomenon and its underlying mechanisms are mixed. We explain this mixed evidence by juxtaposing the glass cliff literature with research on status and uncertainty. Relying on this research, we predict that on average, women are less likely to be appointed to leadership positions during organizational decline. However, firms mostly led by women should exhibit a glass cliff effect. Using 1.6 million senior-level job placements within U.S. public companies from 2014 to 2023, we find that while performance declines are correlated with increased placement of women into leadership positions, this relationship is accounted for by the job categories firms fill while underperforming. After accounting for job categories, organizational decline predicts a lower likelihood of selecting external women for leadership positions, and contrary to the mechanisms proposed by the glass cliff literature, men-dominated firms are responsible for this effect. Our research provides a novel, theoretically driven account of how, why, and where organizational performance declines affect the advancement of women. [ABSTRACT FROM AUTHOR]

Employees have been resigning at higher rates in recent years, particularly since the start of the pandemic. This resignation is true at all wage levels within organizations, from low wage to more senior, mid-career employees with higher wages. This resignation is purported to be due to existing dissatisfaction with the workplace and, consequently, increased expectations around work, including but not limited to wages as well as non-wage benefits and workplace culture (e.g., Sull, Sull, and Zweig, 2022). Furthermore, firms face stakeholder and public pressure to become more inclusive across ethnic and racial groups, and better represent society at large. Many firms in the United States have struggled to both recruit and retain employees from underrepresented groups, highlighting managers' need for best practices to retain this talent. Employee resignations are not only disruptive for employees, but also for the firms that employ them. Such turnover costs are often a significant component of human resource expenses that ultimately affect firm financial performance. Further, turnover can be an indicator of ineffective or even toxic workplace culture, which affects not only job tenure, but the ability of firms to be selective in hiring and the ultimate productivity of those they do hire. What are some of the factors that lead to higher turnover or reduce it? How do firms build a more effective workplace culture that attracts and retains talented employees? This symposium examines these questions from both a large-scale empirical and qualitative research perspective. Three presentations, including two quantitative studies examining wages, workplace culture and turnover, and a qualitative analysis of Walmart's changes to wages and working conditions, bring forth timely and important research to understand how firms can respond to workplace challenges. Specific areas addressed in this symposium include: - how firms can increase diversity among employees, develop more equitable pay practices and create inclusive workplace cultures; - the impact of pay practices on employee turnover and firm performance; and - the impact of increased wages and benefits on workplace culture and performance within a specific firm. A full discussion is planned, one that encompasses academic commentary as well as translation to how this appears in the workplace with an ultimate objective to inform business practices. Do Diverse Directors Influence DEI Outcomes? Author: Jillian Grennan; U. of California, Berkeley Author: Wei Cai; Columbia Business School Author: Aiyesha Dey; Harvard Business School Author: Joseph Pacelli; Harvard Business School Author: Lin Qiu; Krannert School of Management, Purdue U. Still Broke Walmart's Remarkable Transformation and the Limits of Socially Conscious Capitalism Author: Rick Wartzman; Drucker Institute, Claremont Graduate U. (When) Does Paying Living Wages Affect Employee Turnover and Firm Performance? Author: Nathan Barrymore; McCombs School of Business, U. of Texas at Austin Author: Rachelle Sampson; U. of Maryland [ABSTRACT FROM AUTHOR]

We explore whether positive ESG (environment, social, and governance) performance causes changes in labor productivity. We use a random coefficient model to estimate the distribution of the ESG-labor productivity relationship across a large sample of US and European firms. The mean effect of ESG performance on labor productivity is statistically significant and positive in some sectors and significant and negative in others, while the variance of the relationship is always larger than the mean effect and statistically and economically significant. We find this variance is greater within than across sectors, suggesting significant firm-level variation in the returns to ESG. To examine the causal effect of revealing ESG performance, we examine the 2013 UK regulation mandating standardized greenhouse gas emissions reporting. We find that treated firms with better-than-expected ESG performance experienced an increase in labor productivity post-regulation, while treated firms with worse than expected ESG performance saw decreased labor productivity, relative to both pre-treatment trends and a control group. The combination of the correlational and regulatory studies suggests that positive ESG performance positively impacts labor productivity when institutional structures reveal ESG information to stakeholders but has both positive and negative correlations with labor productivity in a population of large firms. [ABSTRACT FROM AUTHOR]

Driven by investor demand reporting on environmental and social performance has become standard for large corporations and is now a component of firm strategy. However, investors, practitioners, and academics all doubt the reliability of third party ESG ratings due to perceived greenwashing. Identifying greenwashing and its causes remains a significant challenge. I address this measurement gap by comparing self-reported ESG practices to independently reported ESG outcomes, generating a novel measure of greenwashing. I next propose that greenwashing behavior depends on the preferences of inside stakeholders (e.g., top management) and outside stakeholders (e.g., investors). I model the interaction between these parties using a cheap talk game, in which the firm can misrepresent their ESG performance, but may be sanctioned for misrepresentation. The model predicts that the relative preferences of inside and outside stakeholders drive greenwashing behavior and ratings accuracy. I test this model's predictions by analyzing earnings call transcripts and a firms' shareholder composition. I find that investors' time horizons shape reported, but not actual, ESG performance, while managers' discussion of ESG issues on earnings calls correlates with both reported and actual ESG performance. As investors' preferences for ESG performance increase relative to those of managers, I find firms increasingly greenwash. [ABSTRACT FROM AUTHOR]

Research suggests that women are underrepresented in senior management because they are less likely than men to compete for promotions and high-promotability assignments. Ascending the corporate ladder, however, also involves sponsors - managers that compete on behalf of protégés for promotions and assignments. Can sponsorship reduce women's underrepresentation in senior management? To address this question, we use a controlled experiment and investigate how gender impacts managers' willingness to sponsor their protégés. We find that when earnings accrue to protégés, the gender gap in competitiveness is eliminated, suggesting that female managers are effective sponsors. However, male managers compete significantly more for male, rather than female, protégés. This gap disappears when male managers receive information about protégés' risk preferences, suggesting an important managerial intervention to increase sponsorship effectiveness. [ABSTRACT FROM AUTHOR]