Attractive women find it easier to reach the top

Beauty matters across many different contexts. This is well-known. However, it appears to apply particularly to women compared to men when it comes to being considered for a top position in the corporate world, which is a new finding. At least, according to Tom Aabo, an associate professor in corporate finance, who has not previously come across such findings in the academic literature.

He has now done something about that. Together with Victor Raaby Jensen, a former MSc student of his, Tom Aabo has published a study showing that the boards of directors of US companies place far greater emphasis on physical attractiveness when selecting a female CEO for their company than when selecting a male CEO.

Women more attractive than men

The associate professor and his former student have found that the women who broke through the glass ceiling and rose to the very top in 635 American companies between 2008 and 2022 are significantly more attractive than their male CEO counterparts.

“There’s strong evidence to suggest that women face discrimination by boards of directors, with women being held to higher beauty standards than men. This discrimination is probably not deliberate, but rather a combination of two well-known psychological biases: we generally prefer attractive people, and we prefer what we know and are used to,” says Tom Aabo.

The latter phenomenon is known as ‘minority bias’ and means that, in this case, the boards of directors are far more accustomed to assessing and appointing male candidates, and therefore simply raise the attractiveness bar when involved in appointing a female candidate to a top position.

Investors do not care

“One might be tempted to think that most boards of directors in large companies are dominated by men, and that these men think with their groins. That cannot be ruled out, but the reason we’re more inclined towards the ‘minority bias’ explanation is that we see the same discrimination when it comes to white and non-white candidates,” explains Tom Aabo, who also emphasises that there does not appear to be any economic rationale behind the discrimination.

“If that were the case, investors would react, but it would seem they couldn’t care less. Like so many other people, investors prefer the appointment of attractive senior executives, but they do not distinguish between female and male CEOs when it comes to attractiveness,” says Tom Aabo.

Facial Attractiveness Score

The researchers reviewed and analysed 956 company announcements regarding the appointment of new CEOs by 635 US non-financial S&P 1500 firms between 2008 and 2022. The newly appointed senior executives were analysed using a computer program that calculates an attractiveness score, known as the FAS (Facial Attractiveness Score). FAS is calculated using generally accepted criteria such as facial symmetry and ratios related to the spacing between different elements of the face.

Investor reactions were analysed by tracking the share prices of the companies immediately before and immediately after the announcement of a new CEO.

The analyses show that the average female CEO is more attractive than 80 per cent of male CEOs. 

Wake-up call

“For boards of directors, this is a wake-up call, because if they think they’re acting in a gender-neutral way and are not influenced by the physical attractiveness of men and women respectively, they need to think again,” says Tom Aabo, who also highlights two weaknesses in the study.

Firstly, the study has looked at a relatively small number of female CEOs. Only 69 of the CEO appointments announced during the period under review were women, whilst the remaining 890 were men. Furthermore, the researchers have only been able to analyse the female candidates who were actually appointed as CEOs; they cannot say anything about the composition of the applicant pool.

“We would have liked to analyse a larger group of women.” The low number is clearly a weakness. But the findings are consistent with other psychological research,” explains Tom Aabo.

“What we cannot see either is whether it is predominantly attractive women who apply for top management positions, or whether less attractive women do not apply in the first place and thus exclude themselves from consideration.” “If that’s the case, then we’ve got an even bigger problem,” says Tom Aabo.

Missing out on talent

What is certain is that the outcome is the same, regardless of the number of female board members. Having women on company boards actually makes no difference.

“It may be because female board members largely operate on men’s terms, and consequently adopt similar behaviours,” says Tom Aabo.

“The overarching conclusion is that it takes more for women to reach the top in the corporate world, and that is obviously a problem if it means missing out on talent,” states the associate professor in corporate finance before going on to say:

“To change this, we need to raise awareness of the issue, and people need to ask themselves whether they actually know what they’re doing.”

Facts

We strive to comply with Universities Denmark’s principles for good research communication. For this reason, we provide the following information as a supplement to this article: 

Type of study	Our primary dataset consists of 959 CEO appointment announcements in 635 non-financial S&P 1500 firms in the period from 2008 to 2022. Our default approach in multivariate analysis is a pooled OLS regression with industry and time fixed effects and standard errors clustered at the firm level.Our primary dataset consists of 959 CEO appointment announcements in 635 non-financial S&P 1500 firms in the period from 2008 to 2022. Our default approach in multivariate analysis is a pooled OLS regression with industry and time fixed effects and standard errors clustered at the firm level.
External collaboration partners	None
External funding	No
Conflict of interest	None
Other	No
Link to the scientific article	Only attractive women are welcome: Board bias and CEO selection
Contact information	Associate Professor Tom Aabo, Department of Economics and Business Economics, Aarhus BSS, Aarhus University [email protected]