Gender and Racial Diversity: Evidence from Earnings Conference Calls

Abstract

We examine the gender and racial diversity of executives participating in earnings calls, and how it evolves over time. Using transcripts of 44,956 earning conference calls of U.S. public firms from 2002 to 2014, we find that female and racial minority executives are much less likely to speak during these calls, conditional on attending. While the number of female and racial minority executives attending conference calls has gradually increased, the number of times women or racial minority executives speak during calls shows no improvement. The differences are more pronounced for C-suite level executives and executives that have worked longer at the firm. These findings are consistent with corporations making efforts to increase diversity in the executive teams that attend earnings calls, but they suggest that greater diversity in attendance does not necessarily lead to more diverse views being voiced, especially at the highest ranks. The capital market responds positively to increased diversity, but only when the females or racial minorities in attendance speak up more frequently. An increase in the mere number of female and minority executives attending a call does not lead to stronger capital market responses.

Keywords: Gender diversity, Racial diversity, Earnings conference call, Capital markets

JEL Classification: G10, G14, J15, J16, M14, M41