Woolworths and Virgin Australia CEO exits show ‘glass cliff’ alive and well

The CEOs of Woolies and Virgin Australia have stepped down. Both are examples of the glass cliff – where a woman is brought in to clean up in a time of crisis.

OPINION

In the last two days, the CEOs of Woolies and Virgin Australia have stepped down.

Both are examples of the glass cliff – where a woman is brought in to clean up in a time of crisis – in action.

After months of building pressure over grocery prices during a cost-of-living crisis culminating in multiple regulator inquiries into price gouging and a trainwreck interview on the ABC’s Four Corners program on Monday night, this morning Woolworths CEO Brad Banducci fell on his sword.

Mr Banducci was at the helm of Woolies for eight years – a period largely characterised by prosperity both in the Australian economy and the grocery sector, despite the road bump of Covid-19.

But the going got tough and the Woolies board decided it was time for a woman to step in and clean up the mess.

Amanda Bardwell’s rise to new Woolworths CEO has all the hallmarks of a glass cliff appointment. Picture: NCA NewsWire / Nikki Short

That woman, Amanda Bardwell, is an accomplished retail executive in her own right and no doubt deserving of the position.

But rather than inheriting the reins in good times, she is walking into a minefield.

It’s not dissimilar to the situation at rival supermarket giant Coles, which is now run by Leah Weckert, who took over from Steven Cain in May last year as the cost-of-living crisis was starting to take off; perhaps Mr Cain saw the writing on the wall a little earlier than Mr Banducci.

If one was feeling very cynical, they might also suggest that it probably also looks good from an optics perspective to have women running supermarkets, given it is women who do the lion’s share of grocery shopping and manage finances at a micro-level in most Australian households.

Michelle Ryan, director of the Global Institute of Women’s Leadership and professor of social and organisational psychology at the Australian National University, who coined the “glass cliff’ term with colleague Alex Haslam from the UK’s Exeter University told news.com.au that while “there is no doubt that Amanda Bardwell is a supremely qualified appointment for the new Woolworths CEO, her appointment is very much in line with the glass cliff phenomenon”.

“When we talk about the glass cliff we talk about the precarity that female leaders often find in their appointments, and with Woolworths appointing their first ever female CEO amid multiple inquiries about competition, and after Mr Banducci had a difficult interview on Four Corners, this position feels like it may indeed be precarious,” Prof Ryan said.

Professor Michelle Ryan told news.com.au that taking over in difficult circumstances puts female leaders in a precarious position. Picture: Jamie Kidston/ANU

The departure of Virgin Australia CEO Jayne Hrdlicka yesterday follows a different script, but it, too, is an example of the glass cliff in action.

The former CEO of Jetstar, Ms Hrdlicka was brought in to run Virgin in 2020 when the airline was on its knees – it was near collapse with administrators appointed before Bain Capital rescued it and snared Ms Hrdlicka to turn it around.

Announcing the news of her departure yesterday, Ms Hrdlicka described the last four years as “heavy lifting across the organisation during the toughest of times”.

In October last year she delivered Virgin Australia’s first profit in 11 years.

Her departure comes as the airline heads for an initial public offering (IPO) which will see it listed on the stock market once again.

In a magazine feature last year Ms Hrdlicka expressed her excitement at leading the business back into public ownership; it would have been her victory lap, the crowning achievement to a remarkable turnaround.

While a statement from Virgin said the decision to depart was Ms Hrdlicka’s call, talk among investors suggests that Australian fund managers – whose support is needed to get the IPO off the ground – are still unsure about Ms Hrdlicka, despite the runs she has on the board.

It seems Ms Hrdlicka may be missing one vital attribute – and it’s not experience.

Despite turning the airline around from the brink of collapse, Virgin CEO Jayne Hrdlicka has failed to win over fund managers needed to support an IPO. Picture: NCA NewsWire/Sarah Marshall

Prof Ryan told news.com.au that while Ms Hrdlicka appointment fits the glass cliff narrative, her departure is in line with the “saviour effect”, “whereby women are seen as good leaders in times of crisis, but are replaced once things even out”.

The past year has also given us other examples of the glass cliff in action.

When Qantas was facing an unprecedented public backlash – again amid accusations of price gouging – and legal action from the Australian Competition and Consumer Commission over allegedly misleading customers, who was appointed to take the place of Alan Joyce last September?

Vanessa Hudson.

At the time of her appointment, Nationals Senator Bridget McKenzie famously said that she hoped Ms Hudson had “a big mop”.

“Incredible, the number of times very good women are asked to come in and clean up a very large mess left by, shall we say, a guy,” Senator McKenzie said.

“This is not a new story. I hope it ends better for her than it does for others.”

Vanessa Hudson and her ‘big mop’ were brought in to clean up Alan Joyce’s mess. Picture: NCA NewsWire / Christian Gilles

And the glass cliff isn’t limited to the private sector with the government also leaning into the trend, as evidenced by the appointment of Michele Bullock to take over as Governor of the Reserve Bank in September last year, following the departure of Philip Lowe.

Dr Lowe left after a blaze of scrutiny – 12 interest rate rises followed a significant blunder when he told Australians in 2021 that interest rates would not rise until at least 2024, before beginning to hike them in May 2022.

Michele Bullock was installed as RBA governor to fix a blunder by her male predecessor. Picture: NCA NewsWire / Martin Ollman

In all these cases, it is the first time in the long and storied history of each of these institutions that a woman has held the top job.

Naysayers of the glass cliff would probably argue that these women – and those who look up to them – should be pleased that they have finally broken through the glass ceiling, regardless of the circumstances of their appointments.

But Prof Ryan said that while having more women in top leadership positions is progress, “if they are more likely to be in such positions in times of crisis we run the risk of reinforcing stereotypes of women not being good leadership”.

“Scrutiny during a crisis is high, and our research has shown that women are often blamed for a crisis that was set in train long before they took the helm,” she told news.com.au.

“Moreover, tenure in crisis roles is much shorter than when all is going well – such that women are likely to have more tumultuous leadership careers.”

To paraphrase the words of Senator McKenzie, I, too, hope it ends better for these women than it has for others.

Michelle Bowes is a finance journalist at news.com.au and the author of Money Queens: Rule Your Money, a financial guidebook for teenage girls that explains gender financial inequalities, as well as how to earn, manage and grow their money.

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Originally published as Woolworths and Virgin Australia CEO exits show ‘glass cliff’ alive and well