Between glass ceilings: Female non-executive directors in UK quoted companies
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Volume 1 Number 4
Between glass ceilings: Female non-executive directors in UK quoted companies Carmen A. Li and Bob Wearing* Received: 10th March, 2004 *Department of Accounting, Finance and Management, University of Essex, Wivenhoe Park, Colchester, Essex, CO4 3SQ, UK; Tel: +44 1206 872750; Fax: +44 1206 873429; E-mail: [email protected]
Carmen A. Li is a lecturer in the Economics Department at the University of Essex, UK. She is an applied researcher and her interests are mainly in the area of development economics. Recently, she has been interested in gender, wage differentials and poverty related issues, and has published work in several academic journals. Bob Wearing is a chartered accountant and Reader in the Department of Accounting, Finance and Management at the University of Essex, UK. His research and teaching interests include international financial reporting, corporate governance and emerging markets, and he has published work in academic and professional journals.
ABSTRACT KEYWORDS: company directors, gender, glass ceiling, corporate governance The Higgs Review and the Tyson Report have drawn attention to board independence, the lack of female directors and the potential positive contribution of female participation to UK corporate governance. This paper examines the situation of female directors in the top 350 UK quoted companies in the context of recent debates about occupational gender differences and corporate governance. In particular, female non-executive directors account for just over 6 per cent of the non-executive directors and receive about two-thirds the remuneration of their male counterparts. Although female participation
increases with firm size, the gender wage gap widens. More importantly, it was found that female nonexecutive directors are at a disadvantage in gaining promotions to positions such as chair of important board sub-committees (ie, the audit committee, the nomination committee and the remuneration committee) and as chairman of the board itself. Given that, in most companies, non-executive remuneration is related to the holding of such posts, this appears to be an important factor in explaining differences in non-executive remuneration. Exclusion of females from these powerful positions also suggests that women face a ‘second glass ceiling’ even after reaching board level. However, the latest version of the Combined Code on Corporate Governance now provides a valuable opportunity for UK company boards to address the issue of gender imbalance and independence on boards of directors.
INTRODUCTION The ‘glass ceiling’ suggests a transparent barrier which women face as they attempt to achieve promotion to the higher levels of organisations. The Hansard Society Commission in the UK referred to the fact that ‘for too many [women] there is a glass ceiling over their aspirations — it allows them to see where they might go, but stops them getting there. In any given occupation and in any given public position, the higher the rank, prestige or power, the smaller the proportion of
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