For the first time in its 67-year history, Signet Jewelers Ltd. will have a female chief executive officer in Virginia Drosos, and she’s going to have her hands full.
Not only is Drosos coming to the world’s largest diamond retailer after a year of sales and stock declines, but during public relations troubles that stem from a wave of sexual harassment claims made by former employees and implicating Signet’s executive culture, as well as its soon-to-be former ceo Mark Light.
Signet maintained that it is headed in a “positive direction” and that Light has chosen to retire due to “health reasons,” which a spokesman said will “require time and attention to ensure complete recovery.”
Cowen & Co. analyst Oliver Chen characterized the announcement as “unexpected,” but said Drosos was a “solid fit” for ceo.
It’s been almost exactly three months since Signet brought on Barbara Jones, a former federal judge and a current partner with Bracewell LLP, to carry out a “thorough review” of its corporate policies surrounding equal opportunity and workplace expectations.
The review came just two months after the public airing of hundreds of declarations by male and female workers at Signet’s Sterling Jewelers subsidiary, which painted a picture of a workplace with widespread sexual harassment by managers and executives. Although the declarations were made as part of ongoing arbitration accusing Sterling of denying women higher pay and promotions, the documents were kept under seal by the arbitrator overseeing the case until February.
When asked about Light’s retirement, Joseph Sellers, counsel for plaintiffs in the arbitration, said he’s still hearing complaints of mistreatment in the company and that he and the litigating employees, who initially sued in 2008, “look forward to the new ceo making long-needed improvements.”
Thom Weidlich, managing director of PR firm PRCG and chief content manager of CrisisResponse Pro, said bringing on a woman “can help” if a company finds itself in a public situation like this.
“I do think it’s a good move — she’s obviously qualified and to hire a woman, it sends a signal,” Weidlich said. “They’re trying to get their act together.”
Drosos has plenty of executive experience to draw on, having served as group president of global beauty for Procter & Gamble, where she worked for 25 years, before becoming ceo of Assurex Health in 2013.
Signet isn’t the only company to seek out a female ceo amid a financial or image-related crisis.
Currently, Uber is reportedly looking only at female candidates to replace ceo Travis Kalanick after allegations of a sexist and harassing workplace culture, which preceded widespread allegations of harassment against a number of other male Silicon Valley executives by female entrepreneurs.
Companies facing other troubles have also turned to women leaders. General Motors made Mary Barra its ceo in 2014, just after its recovery from bankruptcy and sales in Europe and electric vehicles were struggling. Marissa Mayer came to Yahoo in 2012 tasked with a turnaround.
This reaction is common enough in the corporate world, as well as in politics, that it’s been dubbed “The Glass Cliff” by researchers who have found women are more likely than men to find themselves in a leadership role during a crisis or downturn.
First pointed out in a University of Exeter study that looked at 100 large U.K. companies and found those that appointed women to their boards often did so after months of poor financial performance, the “Glass Cliff” has been found repeatedly in subsequent studies. One of the most recent was in 2013, when the Strategic Management Journal published research showing Fortune 500 companies more often promoted women, along with men of color, to ceo after periods of company underperformance.
The Fortune 500 ranking of the largest U.S. corporations by revenues only had 32 female ceos this year — a record at just 6.4 percent.
But if more women are being tapped for ceo positions at companies already in turmoil, of one stripe or another, they’re more likely to be seen as having failed if they can’t solve a company’s problems.
Schneider lasted little more than a year at American Apparel, Meyer was roundly criticized for being unable to boost Yahoo’s web traffic and revenue before the company sold to Verizon, and Barra has led GM through dozens of recalls.
Drosos, who’s signed on for an initial three-year stint at Signet with a $1.1 million base salary, might well have her work cut out for her.
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