Measuring and Calibrating the Racial/Ethnic Densities of Executives in US Public Companies

Abstract

We measure and calibrate the racial and ethnic densities (RAEDs) of executives in US public companies. We find that calibrating executive RAEDs against an economic benchmark that captures the historical demand for and supply of top BA/BS qualified proto-executive talent yields different inferences about executive racial/ethnic under- and overrepresentation 58% of the time as compared to calibrating against the US population. For example, Blacks and Hispanics are overrepresented and Whites underrepresented in S&P 500® executives when calibrated against the historical RAEDS of top BA/BS qualified proto-executive talent matched to executive age. We also find that the magnitudes of the underrepresentations for Blacks and Hispanics and the overrepresentation for Whites are 10X+ smaller using our economic benchmark. This suggests that 90+% of the underrepresentation of Black and Hispanic executives comes from factors that are in play before companies hire their proto-executive talent versus 10% or less coming from actions that companies take at or after they hire their proto-executive talent.

Keywords: Executives, race, ethnicity, representation, density, calibratio

JEL Classification: A13, J01, J15, J29, M12