Do Women In The Boardroom Reduce The Compensation Gap?

Board of directors is an important part of the structure of corporate governance which generating a significant impact on the salary structure of the enterprise. The proportion of women directors is one of the important features of the board, and have a considerable impact on the effect of the Board administration. In order to motivate the employees, reward employees for significant contributions to enterprise and attract more talented employees to achieve corporate strategic goals, companies set different levels of remuneration for workers of different ranks, thus creating an internal salary gap. According to research of psychology, organizational behavior theory, women is more willing to pursue fair than men, will the presence of female directors reduce the pay gap within the enterprise? This article attempts to find the answers to these questions with empirical research, based on reflecting, learning and summarizing of the previous research. This article take the listed companies in China from2008to2012as samples of which screened6722data for the study, the result by using theoretical analysis and empirical analysis are summarized as follow:(1) Women’s participation in the Board of directors does significantly reduce the company’s internal pay gap. In the regression analysis of full sample and the non-state-owned enterprises group, if the number of women directors of the enterprise is more than or equal to2, the pay gap can be significantly inhibited, in addition, the higher the proportion of women directors, the smaller the enterprises pay gap.(2) Only on certain conditions, female directors can have a significant negative effect on company’s internal pay gap.In the context of state-owned enterprises, hardly can female directors constrain the pay gap. And only when the number of female directors within the board reach a certain level, they can play a role in controlling the pay gap.The innovation of this paper:First, the domestic study of the relationship between female directors and corporate governance is still far from enough, in contrast, foreign study in this field has formed a certain system, but empirical research in Chinese listed companies is still insufficient, furthermore, the domestic study on the relationship between female directors and internal pay gap is still a blank;Second, not only the internal pay gap between senior management group,but also the pay gap between the senior management and normal employee has been discussed in this article.The discussion between the female directors and pay gap within the enterprise is relatively complete and adequate.Third, this article divide the full sample into state-owned enterprises and non state-owned enterprise group, and the regression analysis of female directors and corporate internal pay gap was respectively carried out in each group, which make a contribution to the understanding of background on which women directors have a negative impact on the pay gap.Inadequacies of this article:(1) There are two ways to measure the pay gap within the enterprise, relative method and absolute method, this article uses only the relative indicators to measure the pay gap, we can draw a more comprehensive conclusion if both methods are adopted;(2) In the measure of compensation, this article includes only salary income which published on the annual report of those listed companies, the equity incentive and Invisible income are not included, to some extent,this will affect the credibility of research findings.