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Market-Based Solutions to Vital Economic Issues
Research
Mar 4, 2021

Measuring and calibrating the racial/ethnic densities of executives in US publicly traded companies

We measure the racial/ethnic densities (RAEDs) of executives in a random sample of 523 US publicly traded companies and the S&P 500®. When we calibrate the RAEDs of executives as a whole against the RAEDs of the 2019 US population, we find that American Indians/Alaska Natives, Blacks and Hispanics are underrepresented and Whites are overrepresented. However, when we calibrate executive RAEDs against a benchmark that seeks to take into account key features of the demand for and supply of proto-executive talent, namely the RAEDs of the cohorts of students graduating with a bachelor’s degree from the broad New York Times 2017 list of the top 100 US four-year colleges and universities, matched to executives’ BA/BS graduation years, mostly different and at times opposite findings obtain. For example, for executives as a whole in S&P 500® firms, Blacks and Hispanics are overdense relative to their top-bachelor’s-qualified benchmark RAEDs while Whites are underdense. For CEOs in S&P 500® firms, Blacks are underdense while Asians/Pacific Islanders, Hispanics and Whites are at their top-bachelor’s-qualified benchmark expected densities. We conclude that because the sign and magnitude of a deviation from a racial/ethnic benchmark can influence the inferences that are made and policies that are proposed with regard to the presence and/or magnitude of racial bias or discrimination, the choice of benchmark against which executive RAEDs are calibrated is an overlooked but highly important one.


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