Journal of Business Ethics

, Volume 129, Issue 2, pp 265–280 | Cite as

Women on the Board and Managers’ Pay: Evidence from Spain

  • Maria Encarnación Lucas-PérezEmail author
  • Antonio Mínguez-Vera
  • Juan Samuel Baixauli-Soler
  • Juan Francisco Martín-Ugedo
  • Gregorio Sánchez-Marín


The current literature shows great interest in the issue of gender diversity on boards of directors. Some studies have hypothesized a direct relationship between diversity and the value of the firm, but not many examine the intermediate mechanisms that may exert an influence on such relationships. We employ two stages of GMM estimation methodology to exhibit evidences of the relationship between gender diversity and compensation of top managers in the Spanish context. Results show that gender diversity positively affects the effectiveness of boards—in terms of composition, structure, size and functioning—influencing a proper design of top managers compensation linked to company performance. Evidences suggest that legislative actions aimed at increasing the presence of women on boards of directors are justified not only for ethical reasons, but also for reasons of economic efficiency.


Board of directors Gender diversity Governance effectiveness Top managers’ compensation Board characteristics 



Authors acknowledge financial support from Fundación CajaMurcia.


  1. Adams, R. B., Almeida, H. & Ferreira, D. B. (2002). Diversity and incentives in teams: Evidence for corporate boards. Dissertation, University of Chicago, IL.Google Scholar
  2. Adams, R. B., & Ferreira, D. B. (2009). Women in the boardroom and their impact on governance and performance. Journal of Financial Economics, 94, 291–309.CrossRefGoogle Scholar
  3. Arellano, M., & Bond, S. (1991). Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations. The Review of Economic Studies, 58, 277–297.CrossRefGoogle Scholar
  4. Bear, S., Rahman, N., & Post, C. (2010). The impact of board diversity and gender composition on corporate social responsibility and firm reputation. Journal of Business Ethics, 97, 207–221.CrossRefGoogle Scholar
  5. Becker, G. (1964). Human capital. Chicago: University of Chicago Press.Google Scholar
  6. Beckman, C. M., & Haunschild, P. R. (2002). Network learning: The effects of partners’ heterogeneity of experience on corporate acquisitions. Administrative Science Quarterly, 47, 92–124.CrossRefGoogle Scholar
  7. Boyd, B. K. (1995). CEO duality and firm performance: A contingency model. Strategic Management Journal, 16, 301–312.CrossRefGoogle Scholar
  8. Burges, Z., & Tharenou, P. (2002). Women board directors: Characteristics of the few. Journal of Business Ethics, 37, 39–49.CrossRefGoogle Scholar
  9. Campbell, K., & Minguez-Vera, A. (2008). Gender diversity in the boardroom and firm financial performance. Journal of Business Ethics, 83, 435–451.CrossRefGoogle Scholar
  10. Carter, D. A., D’Souza, F. P., Simkins, B. J., & Simpson, W. G. (2010). The gender and the ethnic diversity of US boards and board committees and firm financial performance. Corporate Governance: An International Review, 18, 396–414.CrossRefGoogle Scholar
  11. Carter, D. A., Simkins, B. J., & Simpson, W. G. (2003). Corporate governance, board diversity, and firm value. The Financial Review, 38(1), 33–53.CrossRefGoogle Scholar
  12. Chaganti, R. (1986). Management in women owned enterprises. Journal of Small Business Management, 24, 8–29.Google Scholar
  13. Código Unificado de Buen Gobierno. (2006). Informe del grupo especial de trabajo sobre el buen gobierno de las sociedades cotizadas. Madrid: Comisión Nacional del Mercado de Valores (CNMV).Google Scholar
  14. Conger, J. A., Finegold, D., & Lawler, E. E. (1998). Appraising boardroom performance. Harvard Business Review, 76, 136–148.Google Scholar
  15. Conyon, M. J., & Peck, S. I. (1998). Board control, remuneration committees, and top management compensation. Academy of Management Journal, 41, 146–151.CrossRefGoogle Scholar
  16. Core, J. E., Holthausen, R. W., & Larcker, D. F. (1999). Corporate governance, chief executive officer compensation, and firm performance. Journal of Financial Economics, 51, 371–406.CrossRefGoogle Scholar
  17. Daily, C. M., & Dalton, D. R. (2003). Women in the boardroom: A business imperative. Journal of Business Strategy, 24(5), 8–9.CrossRefGoogle Scholar
  18. Dalton, D. R., & Dalton, C. M. (2011). Integration of micro and macro studies in governance research: CEO duality, board composition, and financial performance. Journal of Management, 37(2), 404–411.CrossRefGoogle Scholar
  19. Eagly, A. H., Johannesen-Schmidt, M. C., & van Engen, M. L. (2003). Transformational, transactional and laissez-faire leadership styles: A meta-analysis comparing women and men. Psychological Bulletin, 129(4), 569–591.CrossRefGoogle Scholar
  20. Fama, E. F. (1980). Agency problems and the theory of the firm. The Journal of Political Economy, 88(2), 288–307.CrossRefGoogle Scholar
  21. Farrell, K., & Hersch, P. (2005). Additions to corporate boards: The effect of gender. Journal of Corporate Finance, 11, 85–106.CrossRefGoogle Scholar
  22. Fontrodona, J., & Sison, A. J. G. (2006). The nature of the firm, agency theory and shareholder theory: A critique from philosophical anthropology. Journal of Business Ethics, 66, 33–42.CrossRefGoogle Scholar
  23. Forbes, D. P., & Milliken, F. J. (1999). Cognition and corporate governance: Understanding boards of directors as strategic decision making groups. Academy of Management Review, 24, 489–505.Google Scholar
  24. Francoeur, C., Labelle, R., & Sinclair-Desgagné, B. (2008). Gender diversity in corporate governance and top management. Journal of Business Ethics, 81(1), 83–95.CrossRefGoogle Scholar
  25. Hahn, P. D. (2007). Vanishing board meetings: Has governance doomed the board meeting? Working Paper, London: Sir John Cass Business School.Google Scholar
  26. Hermalin, B. E., & Weisbach, M. S. (2003). Boards of directors an endogenously determined institution: A survey of the economic literature. Economic Policy Review, 9, 7–26.Google Scholar
  27. Hillman, A. J., Cannella, J., & Harris, I. C. (2002). Woman and racial minorities in the boardroom: How do directors differ? Journal of Management, 28, 747–763.CrossRefGoogle Scholar
  28. Huse, M., & Solberg, A. G. (2006). Gender-related boardroom dynamics: How Scandinavian women make and can make contributions on corporate boards. Women in Management Review, 21(2), 113–130.CrossRefGoogle Scholar
  29. Jensen, M. C. (1993). The modem industrial revolution, exit, and the failure of internal control systems. Journal of Applied Corporate Finance, 6(4), 4–23.CrossRefGoogle Scholar
  30. Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behaviour, agency costs and structure. Journal of Financial Economics, 3, 305–360.CrossRefGoogle Scholar
  31. Jensen, M. C., & Murphy, K. J. (1990). Performance and top management incentives. Journal of Political Economy, 98, 225–264.CrossRefGoogle Scholar
  32. Kanter, R. M. (1977). Men and women of the corporation. New York: Basic Books.Google Scholar
  33. Ley 2/2011, de 4 de marzo, de Economía Sostenible.Google Scholar
  34. Ley de Igualdad [Gender Equality Act] 2007, de 22 de marzo, para la Igualdad efectiva de Mujeres y Hombres.Google Scholar
  35. Lipton, M., & Lorsch, J. W. (1992). A modest proposal for improved corporate governance. Business Lawyer, 48(1), 59–77.Google Scholar
  36. Loden, M. (1985). Feminine leadership or how to succeed in business without being one of the boys. New York: Times Books.Google Scholar
  37. Mahadeo, J. D., Soobaroyen, T., & Hanuman, V. O. (2012). Board composition and financial performance: Uncovering the effects of diversity in an emerging economy. Journal of Business Ethics, 105, 375–388.CrossRefGoogle Scholar
  38. Mateos de Cabo, R., Gimeno, R., & Nieto, M. J. (2012). Gender diversity on European banks’ boards of directors. Journal of Business Ethics, 109, 145–162.CrossRefGoogle Scholar
  39. Milliken, F. J., & Martins, L. (1996). Searching for common treads: Understanding the multiple effects of diversity in organizational groups. Academy of Management Journal, 21, 402–433.Google Scholar
  40. Nielsen, S., & Huse, M. (2010). Women director’s contribution to board decision-making and strategic involvement: The role of equality perception. European Management Review, 7, 16–29.CrossRefGoogle Scholar
  41. Observatory of European SME’s. (2003). SME’s in Europe 2003. Document No. 7. Brussels: European Commission.Google Scholar
  42. Pearce, J., & Zahra, S. (1992). Board composition from a strategic contingency perspective. Journal of Management Studies, 29(4), 411–438.CrossRefGoogle Scholar
  43. Pfeffer, J., & Salancik, G. (1978). The external control of organizations: A resource-dependence perspective. New York: Harper and Row.Google Scholar
  44. Powell, G. N. (1990). One more time: Do female and male managers differ? Academy of Management Perspectives, 4, 68–75.Google Scholar
  45. Robinson, G., & Dechant, K. (1997). Building a business case for diversity. Academy of Management Executive, 11, 21–30.Google Scholar
  46. Sanchez-Marin, G., Baixauli-Soler, J. S., & Lucas-Perez, M. E. (2010). When much is not better? Top management compensation, board structure and performance in Spanish firms. International Journal of Human Resource Management, 21, 2778–2797.CrossRefGoogle Scholar
  47. Sanders, W. G., & Carpenter, M. A. (1998). Internationalization and firm governance: The roles of CEO compensation, top team composition, and board structure. Academy of Management Journal, 41, 158–178.CrossRefGoogle Scholar
  48. Smith, N., Smith, V., & Verner, M. (2006). Do women in top management affect firm performance? A panel study of 2,500 Danish firms. International Journal of Productivity and Performance Management, 55, 569–593.CrossRefGoogle Scholar
  49. Stout, L. (2012). The shareholder value myth. San Francisco: Berrett-Koehler.Google Scholar
  50. Terjesen, S., Sealy, R., & Singh, V. (2009). Women directors on corporate boards: A review and research agenda. Corporate Governance: An International Review, 17(3), 320–337.CrossRefGoogle Scholar
  51. Torchia, M., Calabrò, A., & Huse, M. (2011). Women directors on corporate boards: From tokenism to critical mass. Journal of Business Ethics, 102, 299–317.CrossRefGoogle Scholar
  52. Vafeas, N. (1999). Board meeting frequency and firm performance. Journal of Financial Economics, 53, 113–142.CrossRefGoogle Scholar
  53. Westphal, J. D., & Milton, L. P. (2000). How experience and network ties affect the influence of demographic minorities on corporate boards. Administrative Science Quarterly, 45, 366–398.CrossRefGoogle Scholar
  54. Yermack, D. (1996). Higher market valuation of companies with a small board of directors. Journal of Financial Economics, 40, 185–213.CrossRefGoogle Scholar
  55. Zelechowski, D., & Bilimoria, D. (2004). Characteristics of women and men corporate inside directors in the US. Corporate Governance: An International Review, 12(3), 337–342.CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media Dordrecht 2014

Authors and Affiliations

  • Maria Encarnación Lucas-Pérez
    • 1
    Email author
  • Antonio Mínguez-Vera
    • 1
  • Juan Samuel Baixauli-Soler
    • 1
  • Juan Francisco Martín-Ugedo
    • 1
  • Gregorio Sánchez-Marín
    • 1
  1. 1.Department of Management and Finance, Faculty of Economics and BusinessUniversity of MurciaMurciaSpain

Personalised recommendations