But Can S/He Lead? Market Assessments of Black Leadership in Corporate America

This study analyzes how the appointment of Black leaders to top corporate positions impacts share price in comparison to the appointment of White leaders. Our findings are consistent with the glass cliff theory of corporate appointments. Specifically we find that the appointment of Black leaders has a significantly negative impact on share price in comparison to the appointment of White leaders to comparable positions for the 10-day period following the announcement. We also find that markets assess Black leaders appointed from outside the firm more positively than Black leaders promoted from within. Given these findings, corporate decision makers committed to promoting leadership diversity should focus on formalizing internal promotional processes and adopting preferential recruitment practices for outside candidates. * Both authors contributed equally to this article. For convenience, they are listed in alphabetical order.