Gender Diversity and Say‐on‐Pay: Evidence from UK Remuneration Committees

Alkalbani, Nasser, Cuomo, Francesca and Mallin, Christine (2019) Gender Diversity and Say‐on‐Pay: Evidence from UK Remuneration Committees. Corporate Governance: An International Review, 27. pp. 378-400. ISSN 0964-8410

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Abstract

Empirical Research question/issue We examine whether the presence of women on the remuneration committee has an influence on say‐on‐pay voting. Research findings/insights Based on panel data from the UK's FTSE 350 firms from 2003 to 2015, we find that firms with women on the remuneration committee reduce shareholders’ dissent via say‐on‐pay. However, only firms with a critical mass of more than 30% women on this committee are more likely to have less shareholders’ dissent via say‐on‐pay (i.e. the presence of 30% women or less on this committee is not sufficient). Theoretical/academic implications Our results provide empirical evidence that the gender diversity of directors on the remuneration committee plays a significant role in shaping shareholders’ dissent via say‐on‐pay in the UK. Our results also provide empirical support for some of the previous studies that draw on critical mass theory that imply that women are more effective monitors when they make up a critical mass of more than 30%. Practitioner/policy implications Our results could provide regulators with evidence in favour of improving women's representation on UK remuneration committees. In addition, our results could help shareholders and nomination committee members understand the importance of having women on UK remuneration committees, as they are more likely to avoid suboptimal pay and align directors’ remuneration packages more closely with shareholders’ expectations. Finally, our results could also attract the attention of main stakeholders and the media, especially given their increasing attention both to gender diversity and say on pay.

Item Type: Article
Faculty \ School: Faculty of Social Sciences > Norwich Business School
Depositing User: LivePure Connector
Date Deposited: 24 May 2019 14:41
Last Modified: 11 Jun 2020 01:08
URI: https://ueaeprints.uea.ac.uk/id/eprint/71131
DOI: 10.1111/corg.12292

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