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Does board composition affect the gender pay gap?

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  • Ahamed, M. Mostak
  • Wen, Jie
  • Gupta, Namita

Abstract

By matching a unique firm-level gender pay gap (GPG) data with the corporate board- and firm-characteristics, we find that firms with the presence of foreign directors on board reduce the GPG of the firms in Britain. This result is more pronounced with the profitable firms, and with those that have less than 5000 employees. The findings suggest that policymakers’ emphasis on achieving diversity on the corporate board may also help improve equality in pay.

Suggested Citation

  • Ahamed, M. Mostak & Wen, Jie & Gupta, Namita, 2019. "Does board composition affect the gender pay gap?," Economics Letters, Elsevier, vol. 184(C).
    • Handle: RePEc:eee:ecolet:v:184:y:2019:i:c:s0165176519303076
    DOI: 10.1016/j.econlet.2019.108624
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    References listed on IDEAS

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    1. Zhu, Jigao & Ye, Kangtao & Tucker, Jennifer Wu & Chan, Kam (Johnny) C., 2016. "Board hierarchy, independent directors, and firm value: Evidence from China," Journal of Corporate Finance, Elsevier, vol. 41(C), pages 262-279.
    2. David A. Matsa & Amalia R. Miller, 2011. "Chipping Away at the Glass Ceiling: Gender Spillovers in Corporate Leadership," American Economic Review, American Economic Association, vol. 101(3), pages 635-639, May.
    3. Bugeja, Martin & Matolcsy, Zoltan P. & Spiropoulos, Helen, 2012. "Is there a gender gap in CEO compensation?," Journal of Corporate Finance, Elsevier, vol. 18(4), pages 849-859.
    4. Geraldine Healy & M. Mostak Ahamed, 2019. "Gender Pay Gap, Voluntary Interventions and Recession: The Case of the British Financial Services Sector," British Journal of Industrial Relations, London School of Economics, vol. 57(2), pages 302-327, June.
    5. Kandel, Eugene & Lazear, Edward P, 1992. "Peer Pressure and Partnerships," Journal of Political Economy, University of Chicago Press, vol. 100(4), pages 801-817, August.
    6. Kim, Kyonghee & Mauldin, Elaine & Patro, Sukesh, 2014. "Outside directors and board advising and monitoring performance," Journal of Accounting and Economics, Elsevier, vol. 57(2), pages 110-131.
    7. Maretno Harjoto & Indrarini Laksmana & Robert Lee, 2015. "Board Diversity and Corporate Social Responsibility," Journal of Business Ethics, Springer, vol. 132(4), pages 641-660, December.
    8. David A. Matsa & Amalia R. Miller, 2011. "Chipping Away at the Glass Ceiling: Gender Spillovers in Corporate Leadership," American Economic Review, American Economic Association, pages 635-639.
    9. Estélyi, Kristína Sághy & Nisar, Tahir M., 2016. "Diverse boards: Why do firms get foreign nationals on their boards?," Journal of Corporate Finance, Elsevier, vol. 39(C), pages 174-192.
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    Cited by:

    1. Paola Belingheri & Filippo Chiarello & Andrea Fronzetti Colladon & Paola Rovelli, 2021. "Twenty years of gender equality research: A scoping review based on a new semantic indicatorr," PLOS ONE, Public Library of Science, vol. 16(9), pages 1-27, September.
    2. Izabela Jonek-Kowalska & Marzena Podgorska & Anna Musiol-Urbanczyk & Maciej Wolny, 2020. "Sustainable Development and Motivation Opportunities from the Perspective of Women in the Polish Science Sector in the Light of Statistical Data and Surveys," European Research Studies Journal, European Research Studies Journal, vol. 0(2), pages 456-473.
    3. Jones, Melanie K. & Kaya, Ezgi, 2022. "Organisational Gender Pay Gaps in the UK: What Happened Post-transparency?," IZA Discussion Papers 15342, Institute of Labor Economics (IZA).
    4. Yannis Galanakis & Amanda Gosling, 2024. "Mind the (Gender Pay) Gap - The role of Board Gender Composition," Working Papers 045, The Productivity Institute.
    5. Badar Alshabibi & Shanmuga Pria & Khaled Hussainey, 2022. "Nationality Diversity in Corporate Boards and Tax Avoidance: Evidence from Oman," Administrative Sciences, MDPI, vol. 12(3), pages 1-12, August.

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    More about this item

    Keywords

    Gender pay gap; Board nationality; British firms; Pay equality; Board governance;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods

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