Board Demographics, Governance, Independence or Embeddedness: What is more important for reducing Top Management Team’s gender based pay gap in organizations?

Primary author: Gurdeep Singh Raina
Faculty sponsor: Dr. Arvin Sahaym

Primary college/unit: Carson College of Business
Campus: Pullman

Abstract:

This study advances the research on the relationship between Upper Echelon demographics and the gender based pay gap in the TMT. Specifically, I investigated the relationships between Board demographics, Top Management Team (TMT) demographics and the gender diversity in the Compensation Committees, and gender based pay gap in the TMT. I also assessed the influence of gender diversity in the TMT on these relationships. I used Agency, Social Identity theory, and Demographic similarity to conceptually establish the main relationships as well as the moderated relationships. The study indicated that there seems to be a significant relationship between Board Size, Board Independence, and Independent Director Tenure on the focal board, with all the three variables negatively impacting the gender based pay gap in the TMT at various levels of significance. It also concluded that the gender diversity in the TMT significantly moderates the main relationships. Additionally, the results show that gender and national diversity in the focal board, TMT size, and gender diversity in the Compensation Committee do not impact the gender based TMT pay gap significantly. The moderation is also non-significant in these cases.