Female-led companies more likely to be targeted by activist investors, MU research finds

Women are underrepresented in leadership positions in the U.S., making up only about 5 percent of Fortune 500 CEOs. Previous research has suggested that beyond the “glass ceiling,” which makes moving up in a company more difficult for women, a “glass cliff” exists that represents increased challenges for women who attain leadership roles. Now, research from the University of Missouri has found that businesses led by female CEOs are more likely to be targeted by activist investors, who buy shares of a company with the intent to direct management decisions.

“Our results are quite disconcerting,” said Daniel Turban, a professor of management and the Emma S. Hibbs/Harry Gunnison Brown Chair of Business and Economics at the Robert J. Trulaske, Sr. College of Business. “Shareholders who buy 5 percent or more of a publicly-traded firm with the intent of changing the direction of that firm must register with the Securities and Exchange Commission as activists, which makes activist investing a very public act. If gender bias is present in such public actions, we have to wonder what other challenges these women are facing that are less public.”