What it means
The term was coined by researchers at the University of Exeter in the mid-2000s. They noticed that in a study of listed companies, women were more likely to be appointed to boards after a period of poor share price performance.
Later studies have looked at politics, law and other fields, with mixed but often similar findings. The business significance is about risk and fairness.
A leader placed in charge of a struggling division faces a much tougher task, so if the results disappoint, the person may be blamed for problems they inherited. Over time this can distort how people judge leadership ability and may discourage able candidates from taking senior jobs.
Boards and finance teams can look at it as a governance question. When they appoint a leader to a turnaround, they should ask whether the person is given the resources, authority and time needed.
They should also compare how performance is judged for leaders who inherit healthy businesses and those who inherit troubled ones. Evidence on the effect is debated, and results vary by country, sector and period.
Some studies suggest it is common, while others find it less so, and it is difficult to separate from other factors, such as the fact that a struggling firm may simply be more open to change. A careful reader treats it as a pattern to watch for rather than a universal rule.
Practical steps include setting clear targets at the time of appointment, agreeing the support that will be provided, and measuring results against the starting position. A leader judged on the improvement achieved, not on the absolute numbers, is treated more fairly.
This also gives the board a better picture of who is really performing. For investors and analysts, the idea offers a useful lens on leadership change announcements.
A new chief executive appointed after a profit warning is walking into a different situation from one appointed in a strong year, and the market reaction should reflect that. Comparing like with like helps avoid unfair conclusions about who is a strong or weak leader.
In practice
Real-world examples.
Example
A retail chain loses $30,000,000 in a year and its board appoints a new chief executive, a woman who previously ran a smaller division. She is asked to cut costs and turn the business around, but is given only twelve months before the board reviews her position.
Example
A hospital trust with a large deficit appoints a new finance director from a minority background. The board sets targets that would be hard for anyone to meet, and the director asks to have them agreed in writing at the outset.
Example
A listed manufacturer reviews its leadership appointments over ten years and compares the results. The audit committee finds that leaders appointed during downturns were judged on absolute profit, and it changes the scorecard to measure improvement from the starting point.
Case study
Seen in the real world.
Ashgrove Retail Group is an illustrative, fictional chain with 60 shops. After three loss-making years, its board appointed a new chief executive from outside and gave her a mandate to return the group to profit within 18 months.
When she reviewed the business, she found that the group's loss before the appointment was $12,000,000 a year. By the end of the second year she had reduced the loss to $4,000,000, but the board's target had been break-even, and some directors called the result a failure.
The chair intervened and reminded the board that the starting point was a $12,000,000 loss and that an improvement of $8,000,000 was substantial. The illustrative lesson is that leaders in a crisis should be judged by the change they achieve and the support they receive, not just by the final number. The board later added a clause to the contract of every turnaround leader that sets milestones against the starting position.
Watch out
Common mistakes.
- Treating the glass cliff as proven in every case, when evidence varies and it is a pattern to examine rather than a rule.
- Judging a turnaround leader on absolute results without allowing for the starting position.
- Confusing it with the glass ceiling, which is the barrier to reaching senior roles, not the risk of the roles that are offered.
Questions
People also ask.
Who coined the term?
It was introduced by researchers at the University of Exeter in the mid-2000s, following a study of company boards.
Does it only affect women?
Most research has focused on women, but studies have also examined people from minority groups and other underrepresented backgrounds.
How can boards reduce the risk?
They can set clear and realistic targets, provide support and resources, and judge leaders on improvement from the starting point.
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