Benchmarking the racial/ethnic representation of executives in S&P 500 firms against the historical qualified labor supply

41 Pages Posted: 5 Mar 2021 Last revised: 1 Feb 2024

See all articles by Y Sekou Bermiss

Y Sekou Bermiss

U of North Carolina at Chapel Hill

Jeremiah Green

Texas A&M University - Department of Accounting

John R. M. Hand

University of North Carolina Kenan-Flagler Business School

Date Written: January 30, 2024

Abstract

Racial/ethnic representation in U.S. corporate leadership is an important topic in academia and practice. Since profit-maximizing firms will seek to hire the most qualified candidates, and as corporate leadership develops over decades, we benchmark the racial/ethnic representation of S&P 500 executives against the racial/ethnic composition of the qualified labor supply at the time the executives were first hired, which for U.S. domestic executives we take to be the BA/BS graduating cohorts of the New York Times Top 100 U.S. colleges and universities plus two top HBCUs, matched to executive age. We show that when benchmarked in this way, the magnitudes of under- or over-representations across racial/ethnic groups are typically very much smaller than when the benchmark is the current U.S. population, and that at times inversions from racial/ethnic under-representation to over-representation and vice-versa occur across the two benchmarks. We conclude that our results do not support the view that inequitable hiring or promotion decisions by firms drive the U.S. population-benchmarked large over-representation of White and large under-representation of Black and Hispanic executives. We also suggest that social policy actions having to do with executive representation are likely to have the largest long-term results if they focus on current undergraduate and pre-college students, and if policy makers accept that the effects of such policy actions will likely take 20-40 years before they are seen in the racial/ethnic proportions of S&P 500 executives.

Keywords: Executives, race, ethnicity, representation, benchmarking, qualified labor supply

JEL Classification: A13, J01, J15, J29, M12

Suggested Citation

Bermiss, Yerodin Sekou and Green, Jeremiah and Hand, John R. M., Benchmarking the racial/ethnic representation of executives in S&P 500 firms against the historical qualified labor supply (January 30, 2024). Available at SSRN: https://ssrn.com/abstract=3797715 or http://dx.doi.org/10.2139/ssrn.3797715

Yerodin Sekou Bermiss

U of North Carolina at Chapel Hill ( email )

McColl Building
Chapel Hill, NC 27599-3490
United States

Jeremiah Green

Texas A&M University - Department of Accounting ( email )

430 Wehner
College Station, TX 77843-4353
United States

John R. M. Hand (Contact Author)

University of North Carolina Kenan-Flagler Business School ( email )

McColl Building
Chapel Hill, NC 27599-3490
United States
919-962-3173 (Phone)
919-962-4727 (Fax)

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