Closing the gender gap in top management teams: An examination of diversity and compensation parity in family and non-family firms

• Published in: Journal of family business strategy 2021-12, Vol.12 (4), p.100388, Article 100388
• Main Authors: Jain, Shalini Sarin, Fernando, Guy D., Tripathy, Arindam, Bhatia, Sandhya
• Format: Article
• Language: English
• Subjects: Compensation parity; Family firms; Gender diversity; Socioemotional wealth; Top management teams
• ISSN: 1877-8585; 1877-8593
• DOI: 10.1016/j.jfbs.2020.100388

•Ownership structure is a key driver in motivation and ability to bridge gender disparity divide.•Key and novel finding that gender compensation gap is dramatically attenuated in family firms.•By including both gender diversity and pay, we offer a comprehensive picture of the status of female executives in the US.•Attend to calls for gender equity and responsible employee practice research in family business studies.•Ex-ante predict and empirically confirm, the Janus-faced nature of family firm behavior (bright and dark side). This study examines gender equity – representation and compensation in top management – in listed family and non-family firms in the U.S. We integrate diversity, gender, and family firm perspectives, to understand how family firms vary from their non-family peers when making strategic choices about achieving gender parity in executive positions. Our empirical analyses confirm that family firms lag non-family firms in gender representation, suggesting they do not fully harness the potential advantages of female leadership. Our novel finding, however, is that family firms are successful in attenuating the gender compensation gap in their top management teams. Our results illustrate how family firms leverage their distinct ‘familial’ features to both preserve their socioemotional wealth and add to their inimitable resource cache, while also being socially responsible on a societal level. This study advances our understanding of the important role of ownership structure in bridging the persistent gender equity divide.