Director Diversity, Turnover, and Promotion

59 Pages Posted: 23 Oct 2018 Last revised: 17 Nov 2019

See all articles by N.K. Chidambaran

N.K. Chidambaran

Fordham University - Gabelli School of Business

Yun Liu

Claremont Colleges - Keck Graduate Institute

Nagpurnanand Prabhala

The Johns Hopkins Carey Business School

Date Written: October 1, 2019

Abstract

We test whether a director’s diversity relative to the rest of the board explains two important labor market outcomes, retention and promotion. We find that the results are asymmetric across diversity dimensions and outcomes. Retention is more likely but promotion is less likely for gender-diverse (women) directors. Both retention and promotion are less likely for age- and ethnicity-diverse directors. Thus, identity-diverse directors fare better only on the identity dimensions and labor market outcomes on which boards face external pressure. In contrast, skill-diverse directors are more likely to be both retained and promoted to leadership positions.

Keywords: Board of Directors; Director Turnover; Corporate Governance; Director Skills; Diversity; Identity; Homophily; Identity Economics.

JEL Classification: G30, G32, G34

Suggested Citation

Chidambaran, N.K. and Liu, Yun and Prabhala, Nagpurnanand, Director Diversity, Turnover, and Promotion (October 1, 2019). Available at SSRN: https://ssrn.com/abstract=3260655 or http://dx.doi.org/10.2139/ssrn.3260655

N.K. Chidambaran

Fordham University - Gabelli School of Business ( email )

United States

Yun Liu

Claremont Colleges - Keck Graduate Institute ( email )

535 Watson Drive
Claremont, CA 91711
United States

Nagpurnanand Prabhala (Contact Author)

The Johns Hopkins Carey Business School ( email )

100 International Drive
Baltimore, MD 21202
United States
+1 410 234 4532 (Phone)

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