The Racial Pay Gap on Corporate Boards of Directors

Nationwide, about 7 percent of members of corporate boards of directors are members of ethnic minority groups and 12 percent are women. Laura Field, a professor of finance at the University of Delaware, is the lead author of a new study that found that nationwide women and minorities serving on corporate boards of directors are compensated at a higher rate than White men. But this is because women and ethnic minorities tended to be more prevalent on boards of directors of larger firms that pay their directors more.

But the study, co-authored by Matthew South and Adam Yore of the University of Missouri, found that on the boards of the largest companies that pay their directors at a higher rate, women and minorities are actually paid less than White men on these large company boards. The pay gap, as much as 9 percent, is due to the fact that women and minorities are less likely to hold leadership positions on these boards. This is true despite the fact that women and minorities on these board had higher levels of education, more experience, and more expertise than their White male peers.

The study, “Does Diversity Pay in the Boardroom?” will be presented at the 2017 Annual Meeting of the Eastern Finance Association. The study may be accessed here.

Related:


Leave a Reply



Due to incidents of abuse and harassment that have occurred in the past, JBHE will not publish telephone numbers or email addresses of individuals in this space. If you want to contact someone in a particular article, we suggest you contact them directly not in an open forum.