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Gender Diversity on Boards of Directors and Remuneration Committees: The Influence on Listed Companies in Spain

Women have traditionally been underrepresented on boards of companies, but after some social and legal pressure their presence has been increased during recent years. This paper examines the relation of the presence of female directors both at board meetings and at audit and remuneration committees,...

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Autores principales: García-Izquierdo, Antonio L., Fernández-Méndez, Carlos, Arrondo-García, Rubén
Formato: Online Artículo Texto
Lenguaje:English
Publicado: Frontiers Media S.A. 2018
Materias:
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6108384/
https://www.ncbi.nlm.nih.gov/pubmed/30174626
http://dx.doi.org/10.3389/fpsyg.2018.01351
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author García-Izquierdo, Antonio L.
Fernández-Méndez, Carlos
Arrondo-García, Rubén
author_facet García-Izquierdo, Antonio L.
Fernández-Méndez, Carlos
Arrondo-García, Rubén
author_sort García-Izquierdo, Antonio L.
collection PubMed
description Women have traditionally been underrepresented on boards of companies, but after some social and legal pressure their presence has been increased during recent years. This paper examines the relation of the presence of female directors both at board meetings and at audit and remuneration committees, with CEO pay and the shareholders' consultative vote on managerial remuneration plans (“say on pay”). Using a large sample of Spanish firms listed between 2011 and 2015, our study reveals that firms with female representation on their remuneration committee, display lower levels of CEO pay and CEO pay growth. We also obtain evidence that this effect is attributable to the proprietary female directors. Additionally, from the “say on pay” perspective, female membership of the remuneration committee is associated with a lower number of votes in terms of director remuneration reports and related policies. Overall, our results indicate that female directors on the remuneration committee contribute to a moderation of executive remuneration growth and are consequently perceived by shareholders as valuable resources in the design of executive remuneration plans. This confirms the influence of the minority group, females, in the sustainable progress of these companies. Our results support the presence of female directors not only as a social measure or tokenism, but also as a contribution to good governance practice.
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spelling pubmed-61083842018-08-31 Gender Diversity on Boards of Directors and Remuneration Committees: The Influence on Listed Companies in Spain García-Izquierdo, Antonio L. Fernández-Méndez, Carlos Arrondo-García, Rubén Front Psychol Psychology Women have traditionally been underrepresented on boards of companies, but after some social and legal pressure their presence has been increased during recent years. This paper examines the relation of the presence of female directors both at board meetings and at audit and remuneration committees, with CEO pay and the shareholders' consultative vote on managerial remuneration plans (“say on pay”). Using a large sample of Spanish firms listed between 2011 and 2015, our study reveals that firms with female representation on their remuneration committee, display lower levels of CEO pay and CEO pay growth. We also obtain evidence that this effect is attributable to the proprietary female directors. Additionally, from the “say on pay” perspective, female membership of the remuneration committee is associated with a lower number of votes in terms of director remuneration reports and related policies. Overall, our results indicate that female directors on the remuneration committee contribute to a moderation of executive remuneration growth and are consequently perceived by shareholders as valuable resources in the design of executive remuneration plans. This confirms the influence of the minority group, females, in the sustainable progress of these companies. Our results support the presence of female directors not only as a social measure or tokenism, but also as a contribution to good governance practice. Frontiers Media S.A. 2018-08-17 /pmc/articles/PMC6108384/ /pubmed/30174626 http://dx.doi.org/10.3389/fpsyg.2018.01351 Text en Copyright © 2018 García-Izquierdo, Fernández-Méndez and Arrondo-García. http://creativecommons.org/licenses/by/4.0/ This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) and the copyright owner(s) are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
spellingShingle Psychology
García-Izquierdo, Antonio L.
Fernández-Méndez, Carlos
Arrondo-García, Rubén
Gender Diversity on Boards of Directors and Remuneration Committees: The Influence on Listed Companies in Spain
title Gender Diversity on Boards of Directors and Remuneration Committees: The Influence on Listed Companies in Spain
title_full Gender Diversity on Boards of Directors and Remuneration Committees: The Influence on Listed Companies in Spain
title_fullStr Gender Diversity on Boards of Directors and Remuneration Committees: The Influence on Listed Companies in Spain
title_full_unstemmed Gender Diversity on Boards of Directors and Remuneration Committees: The Influence on Listed Companies in Spain
title_short Gender Diversity on Boards of Directors and Remuneration Committees: The Influence on Listed Companies in Spain
title_sort gender diversity on boards of directors and remuneration committees: the influence on listed companies in spain
topic Psychology
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6108384/
https://www.ncbi.nlm.nih.gov/pubmed/30174626
http://dx.doi.org/10.3389/fpsyg.2018.01351
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