IDEAS home Printed from https://ideas.repec.org/a/eee/jbrese/v180y2024ics0148296324002145.html
   My bibliography  Save this article

The more the merrier? Exploring the effect of women on boards on the gender pay gap in top management teams

Author

Listed:
  • Raina, Gurdeep Singh
  • Sahaym, Arvin
  • Sheppard, Leah D.

Abstract

We examine the relationship between gender composition of boards of directors and the gender pay gap found in top management teams (TMTs), as well as the extent to which this relationship is influenced by Chief Executive Officer (CEO) gender. Using observations of 2,658 U.S. firms taken over 14 years, we find an inverted U-shaped relationship between board gender composition and the TMT pay gap, such that increasing the proportion of women on a board from zero to roughly 15 percent widens the pay gap whereby men are paid more than women. However, as the proportion of women on boards increases beyond 15 percent, the pay gap narrows and continues to do so. Moreover, the presence of a woman CEO strengthens the narrowing effect on the gender pay gap that an increased proportion of women on the board exerts. Our findings are consistent with the integrated insights we draw from queen bee, critical mass, and upper echelons theories. This paper discusses the implications of our work for research and practice.

Suggested Citation

  • Raina, Gurdeep Singh & Sahaym, Arvin & Sheppard, Leah D., 2024. "The more the merrier? Exploring the effect of women on boards on the gender pay gap in top management teams," Journal of Business Research, Elsevier, vol. 180(C).
    • Handle: RePEc:eee:jbrese:v:180:y:2024:i:c:s0148296324002145
    DOI: 10.1016/j.jbusres.2024.114710
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0148296324002145
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jbusres.2024.114710?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Lin Liao & Teng (Philip) Lin & Yuyu Zhang, 2018. "Corporate Board and Corporate Social Responsibility Assurance: Evidence from China," Journal of Business Ethics, Springer, vol. 150(1), pages 211-225, June.
    2. Vishal K. Gupta & Sandra C. Mortal & Xiaohu Guo, 2018. "Revisiting the gender gap in CEO compensation: Replication and extension of Hill, Upadhyay, and Beekun's (2015) work on CEO gender pay gap," Strategic Management Journal, Wiley Blackwell, vol. 39(7), pages 2036-2050, July.
    3. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 38(2), pages 112-134.
    4. Michael K. Bednar & Steven Boivie & Nicholas R. Prince, 2013. "Burr Under the Saddle: How Media Coverage Influences Strategic Change," Organization Science, INFORMS, vol. 24(3), pages 910-925, June.
    5. Shenghui Ma & Yasemin Y. Kor & David Seidl, 2022. "Top management team role structure: A vantage point for advancing upper echelons research," Strategic Management Journal, Wiley Blackwell, vol. 43(8), pages 1-28, August.
    6. Martin J. Conyon, 2014. "Executive Compensation and Board Governance in US Firms," Economic Journal, Royal Economic Society, vol. 124(574), pages 60-89, February.
    7. Keller, Wolfgang & Molina, Teresa & Olney, William W., 2023. "The gender gap among top business executives," Journal of Economic Behavior & Organization, Elsevier, vol. 211(C), pages 270-286.
    8. Orhun Guldiken & Mark R. Mallon & Stav Fainshmidt & William Q. Judge & Cynthia E. Clark, 2019. "Beyond tokenism: How strategic leaders influence more meaningful gender diversity on boards of directors," Strategic Management Journal, Wiley Blackwell, vol. 40(12), pages 2024-2046, December.
    9. Mariateresa Torchia & Andrea Calabrò & Morten Huse, 2011. "Women Directors on Corporate Boards: From Tokenism to Critical Mass," Journal of Business Ethics, Springer, vol. 102(2), pages 299-317, August.
    10. Marianne Bertrand & Claudia Goldin & Lawrence F. Katz, 2010. "Dynamics of the Gender Gap for Young Professionals in the Financial and Corporate Sectors," American Economic Journal: Applied Economics, American Economic Association, vol. 2(3), pages 228-255, July.
    11. Marianne Bertrand & Kevin F. Hallock, 2001. "The Gender Gap in Top Corporate Jobs," ILR Review, Cornell University, ILR School, vol. 55(1), pages 3-21, October.
    12. Richard A. Bettis & Constance E. Helfat & J. Myles Shaver & Heather Berry & Aseem Kaul, 2016. "Replicating the multinationality-performance relationship: Is there an S-curve?," Strategic Management Journal, Wiley Blackwell, vol. 37(11), pages 2275-2290, November.
    13. Karpowitz, Christopher F. & Mendelberg, Tali & Shaker, Lee, 2012. "Gender Inequality in Deliberative Participation," American Political Science Review, Cambridge University Press, vol. 106(3), pages 533-547, August.
    14. Michelle M. Duguid & Denise Lewin Loyd & Pamela S. Tolbert, 2012. "The Impact of Categorical Status, Numeric Representation, and Work Group Prestige on Preference for Demographically Similar Others: A Value Threat Approach," Organization Science, INFORMS, vol. 23(2), pages 386-401, April.
    15. Francine D. Blau & Lawrence M. Kahn, 2003. "Understanding International Differences in the Gender Pay Gap," Journal of Labor Economics, University of Chicago Press, vol. 21(1), pages 106-144, January.
    16. Donald C. Hambrick & Stephen E. Humphrey & Abhinav Gupta, 2015. "Structural interdependence within top management teams: A key moderator of upper echelons predictions," Strategic Management Journal, Wiley Blackwell, vol. 36(3), pages 449-461, March.
    17. Banu Ozkazanc†Pan & Susan Clark Muntean, 2018. "Networking towards (in)equality: Women entrepreneurs in technology," Gender, Work and Organization, Wiley Blackwell, vol. 25(4), pages 379-400, July.
    18. Mary Ellen Carter & Francesca Franco & Mireia Gine, 2017. "Executive Gender Pay Gaps: The Roles of Female Risk Aversion and Board Representation," Contemporary Accounting Research, John Wiley & Sons, vol. 34(2), pages 1232-1264, June.
    19. M. K. Chin & Matthew Semadeni, 2017. "CEO political ideologies and pay egalitarianism within top management teams," Strategic Management Journal, Wiley Blackwell, vol. 38(8), pages 1608-1625, August.
    20. Singh, Sanjay Kumar & Gupta, Shivam & Busso, Donatella & Kamboj, Shampy, 2021. "Top management knowledge value, knowledge sharing practices, open innovation and organizational performance," Journal of Business Research, Elsevier, vol. 128(C), pages 788-798.
    21. Duguid, Michelle, 2011. "Female tokens in high-prestige work groups: Catalysts or inhibitors of group diversification?," Organizational Behavior and Human Decision Processes, Elsevier, vol. 116(1), pages 104-115, September.
    22. Dane P. Blevins & Steve Sauerwald & Jenny M. Hoobler & Christopher J. Robertson, 2019. "Gender Differences in Pay Levels: An Examination of the Compensation of University Presidents," Organization Science, INFORMS, vol. 30(3), pages 600-616, May.
    23. Ingersoll, Alicia R. & Cook, Alison & Glass, Christy, 2023. "A free solo in heels: Corporate risk taking among women executives and directors," Journal of Business Research, Elsevier, vol. 157(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Homroy, Swarnodeep & Mukherjee, Shibashish, 2021. "The role of employer learning and regulatory interventions in mitigating executive gender pay gap," Journal of Corporate Finance, Elsevier, vol. 71(C).
    2. Arjun Mitra & Corinne Post & Steve Sauerwald, 2021. "Evaluating Board Candidates: A Threat-Contingency Model of Shareholder Dissent Against Female Director Candidates," Organization Science, INFORMS, vol. 32(1), pages 86-110, January.
    3. Xu, Lei & Ou, Amy Y. & Park, Haemin Dennis & Jiang, Han, 2024. "Breaking barriers or maintaining status quo? Female representation in decision-making group of venture capital firms and the funding of woman-led businesses," Journal of Business Venturing, Elsevier, vol. 39(1).
    4. Francesconi, Marco & Parey, Matthias, 2018. "Early gender gaps among university graduates," European Economic Review, Elsevier, vol. 109(C), pages 63-82.
    5. Rama K. Malladi & Joshua D. Mean, 2021. "Is it a gender representation issue or a gender pay gap issue? A study of the replaced executives in the USA," Business Economics, Palgrave Macmillan;National Association for Business Economics, vol. 56(2), pages 67-80, April.
    6. 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.
    7. Hazan, Moshe & Cohen, Alma & Weiss, David, 2021. "Politics and Gender in the Executive Suite," CEPR Discussion Papers 14513, C.E.P.R. Discussion Papers.
    8. Javakhadze, David & Shelton, Austin, 2022. "Executive social connections and gender pay gaps," Journal of Corporate Finance, Elsevier, vol. 73(C).
    9. Astrid Kunze & Katrin Scharfenkamp, 2022. "Gender Diversity, Gender in the Boardroom and Gender Quotas," CESifo Working Paper Series 10077, CESifo.
    10. Kunze, Astrid & Scharfenkamp, Katrin, 2022. "Gender Diversity, Labour in the Boardroom and Gender Quotas," IZA Discussion Papers 15691, Institute of Labor Economics (IZA).
    11. Francis, Bill B. & Hasan, Iftekhar & Hovakimian, Gayane & Sharma, Zenu, 2023. "Gender pay gap in American CFOs: Theory and evidence," Journal of Corporate Finance, Elsevier, vol. 80(C).
    12. Nguyen, Thi Hong Hanh & Ntim, Collins G. & Malagila, John K., 2020. "Women on corporate boards and corporate financial and non-financial performance: A systematic literature review and future research agenda," International Review of Financial Analysis, Elsevier, vol. 71(C).
    13. Guo, Xiaohu & Gupta, Vishal K. & Jackson, William E. & Mortal, Sandra C., 2021. "Is there a racial gap in CEO compensation?," Journal of Corporate Finance, Elsevier, vol. 69(C).
    14. Kunze, Astrid & Katrin Scharfenkamp, Katrin, 2022. "Gender diversity, labour in the boardroom and gender quotas," Discussion Paper Series in Economics 16/2022, Norwegian School of Economics, Department of Economics.
    15. Jennifer Merluzzi, 2017. "Gender and Negative Network Ties: Exploring Difficult Work Relationships Within and Across Gender," Organization Science, INFORMS, vol. 28(4), pages 636-652, August.
    16. Elkinawy, Susan & Hibbert, Ann Marie & Talukdar, Bakhtear, 2023. "Gender differences in CEO risk tolerance: A look at fixed pay," Global Finance Journal, Elsevier, vol. 57(C).
    17. Tani, Massimiliano & Valentine, Andrew & Sharpe, Kieran, 2022. "The Gender Pay Gap in the CEOs' Labor Market," IZA Discussion Papers 15781, Institute of Labor Economics (IZA).
    18. Avis Devine & Isabelle Jolin & Nils Kok & Erkan Yönder, 2024. "How Gender Diversity Shapes Cities: Evidence from Risk Management Decisions in REITs," Journal of Business Ethics, Springer, vol. 189(4), pages 723-741, February.
    19. Ferreira, Daniel & Ginglinger, Edith & Laguna, Marie-Aude & Skalli, Yasmine, 2017. "Board Quotas and Director-Firm Matching," CEPR Discussion Papers 12117, C.E.P.R. Discussion Papers.
    20. Trinh, Vu Quang & Trinh, Hai Hong & Nguyen, Thi Hong Hanh & Vo, Xuan Vinh, 2023. "Board gender diversity and firm-level climate change exposure: A global perspective," Finance Research Letters, Elsevier, vol. 55(PB).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jbrese:v:180:y:2024:i:c:s0148296324002145. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jbusres .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.