By Ellen McGirt
January 12, 2017

Many thanks to the amazing Jeremy Quittner for filling in for me this week! —E.M.

A new study by researchers from the University of Missouri and the University of Delaware shows that when women and people of color serve on high-profile corporate boards, they are paid less than their white, male counterparts, and are less likely to be given powerful leadership positions which can contribute to the company, enhance their reputations and increase their compensation.

Researchers Matthew Souther of from Mizzou’s Robert J. Trulaske, Sr. College of Business, along with co-authors Adam York, assistant professor of finance, and Laura Field, professor of finance at the University of Delaware, reviewed 1,800 companies and 70,000 board members and their compensation. Their findings are a combination punch:

  • Minority board members are more likely to be found at the bigger, more high-profile firms that have done a better job being inclusive.
  • These same board members are less likely to chair committees or serve on the types of “power” committees, like compensation, that can build their reputations and earn them higher pay.

Oh, and here’s the kicker: Minority board members tend to be more qualified than their white, male counterparts in terms of education, experience, and expertise.

The difference in compensation is, on average, in the 3 to 9 percent range, which doesn’t sound like much, until you think about it. “The pay gap is not huge, so we think this might be some type of subconscious effect,” said Yore in a statement published by the University of Missouri. “Yet, it is something that could impact a board because they could be missing a significant perspective by not having a minority or female on the board serving in a leadership role. We also found that the pay gap was larger for those who had served longer, which also is concerning as boards always want to attract and retain the best people.”

This “subconscious effect” is bound to be familiar to any “minority” who works in a big company or has earned a seat at any table of influence. Sure, corporations are spending millions of dollars trying to train these subconscious effects away, and I have to believe it will help in the long run. But findings like these show that being just a few degrees away from real power can still be a world away.

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