Only attractive women are welcome: Board bias and CEO selection

CEOs matter, and beauty matters. Based on social identity theory, we argue that women and men are likely to be held to different beauty standards by the boards of directors when these boards select the new CEO. Our empirical results support our arguments. Specifically, we investigate 959 CEO turnovers in non-financial S&P 1500 firms in the period from 2008 to 2022. We find that newly appointed female CEOs are significantly more attractive than their male peers. Thus, the median female CEO is more attractive than a male CEO at the 75th percentile level. We find no indication of an economic rationale for such a biased beauty preference. When investors are informed of the new CEO, they value CEO beauty equally across the two genders (i.e., no gender bias). The discrimination by the boards of directors seems to be related to women's minority status (i.e., we get similar results for non-white candidates) rather than the sexualization of women although we cannot rule out that both may coincide. Our findings are robust and economically significant. Thus, they are important in understanding the lack of gender equality and the avenues through which women face (beauty) discrimination in the upper echelons.