At the Table But Can’t Break Through the Glass Ceiling: Board Leadership Positions Elude Diverse Directors

Abstract

This paper examines board leadership roles for diverse (female and minority) directors. Although diverse board representation has been increasing, we find that diverse directors are significantly less likely to serve as board chairman, lead director, or audit or compensation committee chair, even though they possess stronger professional qualifications than non-diverse directors. We find no evidence that diverse directors are less effective: they receive higher shareholder support in elections, and board monitoring quality for boards with diverse leaders is at least as strong as for non-diverse leaders. Results suggest that failing to obtain board leadership leads to attrition of diverse directors.

Keywords: chairman of the board, board committees, director compensation, boards of directors, diversity, gender, women, minorities

JEL Classification: J15, J16, J31, J71, G34, M14