BY NEYA THOMAS
Over the last several years, American firms have been hiring more foreign-born chief executive officers, according to UNC Greensboro Bryan School Assistant Professor Dr. Marketa Rickley. This is true of firms like Google, Pepsi, Microsoft, and more.
But, once on the job, are these CEOs held to a higher performance standard than their US-born counterparts? This is a question Rickley poses in her co-authored research article “Are foreign-born CEOs held to a higher performance standard? The role of national origin in CEO dismissals” which appeared in the prominent management-focused Global Strategy Journal.
According to the U.S. Bureau of Labor Statistics, foreign-born workers are more likely to be fired when economic conditions decline than workers who were born in the United States. This is true for blue-collar workers and, to a lesser extent, also for white-collar workers. Through collaboration, Rickley and Florida Atlantic University’s Dr. Yannick Thams wondered whether this pattern also applied to managers in C-suite roles. This led them to ask whether foreign-born CEOs are more likely to be dismissed than their American-born counterparts when firm performance declines.
Throughout her research, Rickley gathered information from companies in the Standard & Poor’s 1500 between the years of 2000 and 2018 in order to predict the likelihood of CEO dismissal depending on CEO national origin, firm performance, and controlling for a battery of additional variables. The final study sample encompassed nearly 12,000 observations.
Rickley’s research found that when companies performed well, there was no significant difference in the likelihood of dismissal for foreign-born and US-born CEOs. However, the same could not be said when the company was performing poorly. With all other factors equal, there was a greater likelihood of dismissal for foreign-born CEOs. The data showed that the likelihood of dismissal for foreign-born CEOs during times of poor performance was nearly 16 percent in comparison to 4 percent for U.S.-born CEOs.
“Our findings suggest that employment bias against immigrants does not pertain only to blue- or white-collar workers but that it goes all the way up the chain into the highest echelons of management,” Rickley said. “Takeaways from this research should move companies to provide an objective standard not only for hiring, but also for dismissals. One that is as transparent as possible.”
Rickley is currently an assistant professor in the Bryan School’s Department of Management. She joined UNCG in 2019 and holds her PhD in Management from Boston University. Of her research, Rickley says she tries to teach and investigate the intersection of strategic management and international business.