The glass cliff of female corporate leaders in FTSE 350 companies and the precariousness of COVID‐19

Abstract The top listed companies in the UK (FTSE 350 companies) experienced an unprecedented increase in female Chairs during 2020–2022, coinciding with the COVID‐19 pandemic. The phenomenon of a disproportionate increase in women's appointments to leadership positions during risky scenarios is called the glass cliff (GC), previously observed during the 2008–2009 financial crisis and other periods of precarity. However, academic knowledge on the role of the GC phenomenon in female Chair and CEO appointments is under‐examined. In this study, using the Wharton Research Data Service's BoardEx panel data on female leaders, we examine this phenomenon in FTSE 350 companies. We employ a dynamic two‐way fixed effects (TWFE) difference‐in‐differences (DiD) analysis, complemented by an event‐study‐type synthetic difference‐in‐differences (SDiD) as a robustness check. Companies with declining financial performance (Return on Investment [RoI] and Return on Asset [ROA]) were 8–12 percentage points more likely to appoint female Chairs. The results for female CEOs were not statistically significant. We argue that during precarity, FTSE 350 companies that face institutional pressures to appoint women to leadership positions may do so for roles aligning with socially prescriptive roles for women, thereby obtaining legitimacy. Leadership roles that reflect the incongruity between women's social roles and expected leadership attributes may continue to resist institutional pressures, despite the context's precarity. These findings are robust across the specifications. This study also provides valuable insights for industry praxis and policy.