No Reason to Leave: The Effects of CEO Diversity-Valuing Behavior on Psychological Safety and Turnover for Female Executives

An extensive body of research has shed light on the structural challenges and stereotypic barriers that lead female leaders to exit their organizations. However, we know little about the factors that mitigate these exits. In this study, we advance the literature by examining how the chief executive officers (CEO's) diversity-valuing behavior relates to female executives' likelihood of turnover. We integrate insights from the literature on gender inclusive leadership, turnover, and psychological safety to propose psychological safety as a key underlying mechanism for this outcome. We test and find support for our theory and hypotheses using a unique data set that combines primary survey data and archival data on turnover for a sample of 365 male and female executives from large U.S. public firms. Our findings show that CEO diversity-valuing behavior is associated with psychological safety for female executives and that psychological safety, in turn, mediates the effect on female executive turnover. We do not find these effects in men. Our study contributes to the literature on gender diversity and female leadership by shifting the conversation from discussing barriers constraining women's longevity to how CEOs enable female executives' retention through diversity-valuing behaviors.