Board Diversity and Shareholder Voting

58 Pages Posted: 18 Nov 2020 Last revised: 27 Aug 2021

See all articles by Ian D. Gow

Ian D. Gow

University of Melbourne; University of Melbourne - Department of Accounting and Business Information Systems

David F. Larcker

Stanford University - Graduate School of Business; European Corporate Governance Institute (ECGI); Stanford University - Arthur & Toni Rembe Rock Center for Corporate Governance

Edward M. Watts

Yale School of Management

Date Written: November 18, 2020

Abstract

The lack of board diversity across gender and race has been one of the most controversial topics in corporate board governance in recent years. Given the central role that shareholders have in approving director appointments, we investigate whether shareholders value diversity on corporate boards by analyzing their voting patterns in director elections. Despite many shareholders’ public commitments of supporting board diversity, we show that shareholders have not historically been proactive in using their votes to motivate companies to increase diversity among corporate boards. This finding persists over time and across key shareholders who have been some of the most outspoken proponents of board diversity.

Keywords: Board of directors; Diversity; Shareholder voting; Environmental, Social, and Governance (ESG)

JEL Classification: G30, G34, G23, M14, J71

Suggested Citation

Gow, Ian D. and Larcker, David F. and Watts, Edward, Board Diversity and Shareholder Voting (November 18, 2020). Rock Center for Corporate Governance at Stanford University Working Paper No. 245, Stanford University Graduate School of Business Research Paper No. 3915, European Corporate Governance Institute – Finance Working Paper 716/2020, Available at SSRN: https://ssrn.com/abstract=3733054 or http://dx.doi.org/10.2139/ssrn.3733054

Ian D. Gow (Contact Author)

University of Melbourne ( email )

185 Pelham Street
Carlton, Victoria 3053
Australia

University of Melbourne - Department of Accounting and Business Information Systems ( email )

Victoria
Melbourne, Victoria 3010 3010
Australia

David F. Larcker

Stanford University - Graduate School of Business ( email )

Graduate School of Business
518 Memorial Way
Stanford, CA 94305-5015
United States
650-725-6159 (Phone)

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Stanford University - Arthur & Toni Rembe Rock Center for Corporate Governance ( email )

Crown Quadrangle 559 Nathan Ab
Stanford, CA 94305-8610
United States

Edward Watts

Yale School of Management ( email )

165 Whitney Ave
New Haven, CT 06511

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
485
Abstract Views
1,742
rank
73,514
PlumX Metrics