Gender Differences in Executive Compensation on British Corporate Boards: the Role of Conditional Conservatism

Habiba Al-Shaer and Mostafa Harakeh
Additional contact information
Habiba Al-Shaer: Newcastle University Business School, Newcastle University, Newcastle Upon Tyne NE1 7RU, UK
Mostafa Harakeh: Adnan Kassar School of Business, Lebanese American University, Beirut Campus, P.O. Box 13-5053, Chouran Beirut 1102 2801, Lebanon

The International Journal of Accounting (TIJA), 2020, vol. 55, issue 01, 1-48

Abstract: We exploit the effectiveness of the [Davies Report (2011). Women on Boards. London: Department for Business, Innovation & Skills], which urged FTSE 350 companies to increase female representation on corporate boards, to examine the potential effect that this may have on the gender pay differential at the executive level. To this end, we employ a multivariate regression and a difference-in-differences approach that compare executive compensation between all-male executive boards and boards with at least one female executive. Using a sample of FTSE 350 companies that spans the period 2008–2015, we find that differential executive compensation exists in bonus and equity compensation following the Davies Report (2011). Given that the differential compensation exists in the components primarily determined by the firm’s reported earnings and that female directors are prone to exhibit higher conditional conservatism in their financial reporting, we examine whether the firm’s financial reporting practice plays a role in determining the differential executive compensation. Our investigation reveals that the presence of female executive directors on the board makes the effect of conditional conservatism more prominent, resulting in lower bonus and equity-based compensation.

Keywords: Executive compensation; female executives; conditional conservatism; Davies Report (search for similar items in EconPapers)
Date: 2020
References: Add references at CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://www.worldscientific.com/doi/abs/10.1142/S109440602050002X
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wsi:tijaxx:v:55:y:2020:i:01:n:s109440602050002x

Ordering information: This journal article can be ordered from

DOI: 10.1142/S109440602050002X

Access Statistics for this article

The International Journal of Accounting (TIJA) is currently edited by A. Rashad Abdel-khalik

More articles in The International Journal of Accounting (TIJA) from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().