The effects of executive gender on firm outcomes: An examination of the influence of assimilation



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In this study, I examine the language style of CEO and CFO dyads to determine if the CFO assimilates to the CEO’s communication style over her/his tenure. Role congruity theory suggests a woman faces prejudice due to the incongruity between the socially accepted female gender role and the normalized perception of a leader, associated with masculine traits. Eagly and Karau (2002) argue that a woman may take on characteristics associated with men to garner respect as a leader. This assimilation potentially diminishes the significant contributions research suggests female executives bring to an organization (e.g., Paustian-Underdahl et al. (2014)). I use the question-and-answer portion of earnings conference calls to perform sentiment analysis on the communication by the CEO and CFO and calculate a measure of language style, which I track over time to determine how style changes during the CEO-CFO relationship. I also examine how diversity on the board of directors impacts this relationship. Contrary to my expectations, I do not find evidence of assimilation in female CFOs. Rather, the results suggest that over time, both male CEOs and CFOs take on a more communal language style, moving towards a style more aligned with feminine stereotypes. This change in style appears to be driven by a monitoring force, namely the gender diversity of the board of directors. My findings are important to policy makers as there are increased calls for gender diversity in firms and on boards of directors, as well as to the boards themselves for consideration in hiring decisions for top executives.

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Gender, Chief Executive Officer, Chief Financial Officer, Role Congruity Theory, Upper Echelons Theory, Textual Analysis