Are Director Equity Policies Exclusionary?

Business Ethics Quarterly 13 (4):415-432 (2003)
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Abstract

Abstract:This paper examines two recent trends relative to boards of directors’ compensation, and their potential incompatibility. There has been some progress in increasing board diversity, specifically the inclusion of women and minorities on boards. The increasing trend requiring directors to hold/purchase equity as a requirement of board membership may seriously compromise further improvements in diversifying boards. Also, an increasing number of companies compensate directors partially or fully in stock grants and options. These compensation policies may be exclusionary, especially for women and minorities, impacting the quality of boardroom discussions and decisions. This study systematically examines whether corporations requiring director equity are exclusionary toward women and minority directors. Contrary to being exclusionary, companies with director stock requirements and annual stock awards have greater representation by women and minorities on their board. Moreover, larger companies are both more likely to have such policies and have higher proportions of women and minorities on the board.

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Citations of this work

Do CEOS get Paid too much?Jeffrey Moriarty - 2005 - Business Ethics Quarterly 15 (2):257-281.
Board diversity in the united kingdom and norway: An exploratory analysis.Johanne Grosvold, Stephen Brammer & Bruce Rayton - 2007 - Business Ethics, the Environment and Responsibility 16 (4):344–357.
Size Matters.John Dobson - 2004 - Business and Professional Ethics Journal 23 (3):45-59.

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