i Gzcokpkpi"vjg"ÐIncuu"Enkhh"Ðphenomenon: A study replication using a Canadian context. By Karen MacDonald University of Prince Edward Island A Signature Project Thesis Submitted to the University of Prince Edward Island, Charlottetown, P.E.I. in Partial Fulfillment of the Requirements for the Master in Business Administration October 2011, Charlottetown, P.E.I. ©Karen MacDonald Advisor: Dr. Wendy R. Carroll School of Business University of Prince Edward Island PERMISSION TO USE SIGNATURE PROJECT REPORT Title of Signature Project: Examining the ÐGlass CliffÑ phenomenon: A study replication using a Canadian context Name of Author: Karen MacDonald Department: School of Business Degree: Master of Business Administration Year : 2011 Name of Supervisor(s): Wendy Carroll In presenting this signature project report in partial fulfilment of the requirements for a Master of Business Administration degree from the University of Prince Edward Island, the author has agreed that the Robertson Library, University of Prince Edward Island, may make this signature project freely available for inspection and gives permission to add an electronic version of the signature project to the Digital Repository at the University of Prince Edward Island. Moreover the author further agrees that permission for extensive copying of this signature project report for scholarly purposes may be granted by the professor qt"rtqhguuqtu"yjq"uwrgtxkugf"vjg"cwvjqtÓu project work, or, in their absence, by the Dean of the School of Business. It is understood that any copying or publication or use of this signature project report or parts thereof for financial gain ujcnn"pqv"dg"cnnqygf"ykvjqwv"vjg"cwvjqtÓu written permission. It is also understood that due recognition shall be given to the author and to the University of Prince Edward Island in any scholarly use which may dg"ocfg"qh"cp{"ocvgtkcn"kp"vjg"cwvjqtÓu report. Address: UPEI School of Business 550 University Avenue Charlottetown, PE C1A 4P3 ii Abstract Gzcokpkpi"vjg"ÐIncuu"EnkhhÑ"phenomenon: A study replication using a Canadian context. By: Karen MacDonald Researchers have been examining barriers and challenges for women in leadership positions from a variety of perspectives ukpeg"vjg"3;:2Óu"yjgp"vjg"Ðincuu"egknkpiÑ"eqpegrv" was coined. More recently researchers have been examining whether women are being placed in precarious leadership positions. Ryan and Haslam (2005) dubbed the term the Ðincuu"enkhhÑ"kp"4227"chvgt"wukpi"c"eqtrqtcvg"dqctf"ngxgn"cpcn{uku"vq"eqorctg"vjg"ghhgev"qh" female board appointments to male counterparts in the U.K. The study in this paper is a replication of T{cp"cpf"JcuncoÓu"glass cliff study in a Canadian context using an event study methodology. In addition to the financial performance outcome of share price used by Ryan and Haslam, this study extends the analysis by also examining excess return data which are less sensitive than share price data. The findings using both financial performance outcomes in the analysis of female board appointees suggest that evidence of the glass cliff phenomenon is not necessarily apparent by examining board level appointments. A review of the relevant literature, a description of the study, the findings, and a discussion about future research directions are presented in this paper. iii Acknowledgements To my advisor Dr. Wendy Carroll, I thank you for your constant encouragement, patience, and support. You have a wonderful talent for teaching and inspiring others to reach for the stars. Thanks also to Dr. Sean Hennessey for his guidance relating to financial data collection and analysis. To the faculty and staff of the UPEI School of Business, thank you, this program is a gift to the Island community. To my fellow students, it was wonderful to learn and laugh with you. To my colleagues and staff at Community and Correctional Services thank you for your patience and support, especially to John Picketts for your guidance over many years, Denise Spenceley for getting me through the crazy days, and Donna Myers, for encouraging, listening, and understanding. To my husband John, thank you for your certainty that I could do this even on the days when I ycupÓv"uwtg0"To my remarkable children, Hannah and Callum, thank you for your love and patience while Mommy went to school. To my best friend Carol MacDonald, thank you for being my Mom. I am truly blessed to have had this opportunity. iv Table of Contents Abstract ............................................................................................................................... ii! Acknowledgements ............................................................................................................ iii! List of Figures ................................................................................................................... vii! CHAPTER 1: INTRODUCTION ...................................................................................... 8! Research Overview ....................................................................................................... 10! Organization of this Thesis ........................................................................................... 11! CHAPTER 2: LITERATURE REVIEW ......................................................................... 12! Women on Boards ......................................................................................................... 12! The Emergence of the Glass Cliff ................................................................................. 22! CHAPTER 3: METHODOLOGY .................................................................................... 30! Method .......................................................................................................................... 30! CHAPTER 4: FINDINGS ................................................................................................ 34! Descriptive Statistics ..................................................................................................... 34! Results ........................................................................................................................... 37! CHAPTER 5: DISCUSSION AND CONCLUSION ....................................................... 41! Summary of Study Findings ......................................................................................... 42! Research Implications ................................................................................................... 42! Limitations and Future Research .................................................................................. 43! Conclusions ................................................................................................................... 45! Appendix A ....................................................................................................................... 53! Appendix B ....................................................................................................................... 56! Appendix C ....................................................................................................................... 59! v Appendix D ....................................................................................................................... 63! Appendix E ....................................................................................................................... 66! Appendix F ....................................................................................................................... 69! Appendix G ....................................................................................................................... 73! Appendix H ....................................................................................................................... 77! Appendix I ........................................................................................................................ 79! Appendix J ........................................................................................................................ 84! Appendix K ....................................................................................................................... 86! Appendix L ....................................................................................................................... 89! Appendix M ...................................................................................................................... 96! Appendix N ..................................................................................................................... 100! Appendix O ..................................................................................................................... 107! Appendix P ..................................................................................................................... 113! Appendix Q ..................................................................................................................... 114! vi List of Tables Table 1. Labour Force Participation Rates of Men and Women 2010 13 Table 2. Comparable Male Appointments Based on Appointment Date Only 37 Table 3. Share Price Analysis Summary 39 Table 4. Excess Return Analysis Summary 40 vii List of Figures Figure 1. Legislators, Senior Officials and Managers that are Women 13 Figure 2. Percentage of Women on Boards Globally 15 Figure 3. Percent of MBAs Earned by Women in Canada 18 Figure 4. Directors in Canada 2009 18 Figure 5. Percent of Companies