Durham Enterprise Centre Seminar with Dr Ahmed Maged Nofal (emlyon)

Do Employees Penalize Female CEOs? Employees’ Right to Represent in Female-led New Ventures

Abstract:

This study investigates whether employees penalize female CEOs in new ventures by examining the impact of employee representation rights on female leaders’ compensation. Drawing on theories of gendered leadership penalties and unintended consequences of institutional arrangements, we argue that granting employees the right to request board representation (RightToRep) disproportionately reduces female CEOs’ compensation. Employing a difference-in-differences design and using a matched employer-employee data from Norway, we exploit a quasi-natural experiment created by a reform mandating the right to request employee representation in ventures with over 30 employees. Results reveal that RightToRep significantly lowers female CEO compensation, independent of education, experience, venture performance, and board gender diversity. Further analysis shows that tentative support that growth in sales might mitigate but does not eliminate this penalty. Robustness checks support a female penalty, showing no similar effects for male CEOs. Our study contributes to the literature on gender disparities in entrepreneurship by uncovering how gender-neutral institutional arrangements unintentionally exacerbate compensation inequalities for female leaders.

About the speaker:

Ahmed Maged Nofal is an Assistant Professor of Entrepreneurship at emlyon Business School. His research examines the developmental and institutional origins of entrepreneurship and new venture dynamics, including entry, growth, survival, and exit. His most recent work has appeared in the Journal of Business Venturing, the Journal of Management, and PLoS ONE. He has been featured in Forbes, Medical Xpress, United Press International, Breitbart, and The Financial. He holds a PhD from the University of Warwick and has received several awards for his research, including Warwick Business School's Outstanding Research Paper Award. He is named one of the 50 Best Business School Professors worldwide by Poets & Quants. He also serves on the editorial review board of Entrepreneurship Theory & Practice.