Minority Membership on Boards of Directors: A Case for Requiring Pictures of Boards in Annual Reports
Critical Perspectives on Accounting, Vol. 16, No. 8, pp. 1019-1033, 2005
Posted: 19 Feb 2008
Affirmative action and diversity continue to be contentious issues in the United States. Financial 14 markets are still reeling from the effects of Enron, WorldCom and other corporate exemplars of 15 corruption and malfeasance. The role of the board of directors in these scandals is the subject of 16 serious and ongoing concern.Weak and/or ineffectual boards are often the consequences of "old-boy 17 networks" and a lack of diversity in membership. This research study argues for an increased presence 18 of gender and race diversity on boards of directors. Empirical evidence is presented that shows a 19 significant increase in the presence of ethnic minorities and females when pictures of board members 20 are included in annual reports.We suggest that requiring pictures of board members in annual reports 21 and regulatory filings would result in a larger presence for gender and race diversity on boards of 22 directors. This requirement is not a significant burden and merely represents compliance with the 23 spirit and intent of the "full disclosure" principle.
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