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Kenan Institute 2022 Annual Theme: Stakeholder Capitalism
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Market-Based Solutions to Vital Economic Issues

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As a magnet for both population and employment growth, North Carolina has a propitious opportunity to create an inclusive and equitable entrepreneurial and small business ecosystem to support the state’s newfound prosperity.

A new personal gift from Bruce Van Saun, Citizens Financial Group Inc. chairman and CEO, and his wife, Kathleen (Katie) Van Saun, will support the Kenan Institute’s annual grand challenge. Starting in 2023, the three-year gift will support the institute’s Distinguished Fellows, who advance thought leadership around the grand challenge’s theme, a key issue that affects business and society. The program is making its debut this year with an exploration of stakeholder capitalism and ESG investing. The Van Sauns earned their MBAs from UNC Kenan-Flagler Business School in 1983 and were married in 1985.

Stakeholder Capitalism

Some analysis indicates companies with diverse executive teams drive more revenue and are more likely to experience higher profits relative to their nondiverse peers, yet founding teams for both high-growth startups and the private capital groups that fund them stand in stark contrast to the U.S. working age population. Why? And why should it matter? In this week’s Kenan Insight, Kenan Institute Distinguished Fellow Emmanuel Yimfor unpacks statistics on the composition of both high-growth startups and private capital groups, explores the economic and societal implications of their lack of diversity and provides suggestions to facilitate change.

We study the effect of government-subsidized childcare on women's career outcomes and firm performance using linked tax filing data. Exploiting a universal childcare reform in Quebec in 1997 and the variation in its timing relative to childbirth across cohorts of parents, we show that earlier access to childcare increases employment among new mothers, particularly among those previously unemployed.

Seventeen states have enacted salary transparency laws to combat pay gaps historically experienced by people of color and women, but the laws take different forms and have produced varying results. How does requiring companies to provide summary salary statistics compare with, for example, preventing companies from asking applicants about their previous salaries? Can such laws actually work against employees? Two experts address these questions and more in this week’s Kenan Insight.

Employees often engage in collective grassroot efforts to bring about gender equity in the workplace. Such coalition-based advocacy is largely driven by women, which has led to debate about whether men’s involvement as allies can help. Integrating literatures on signaling and legitimacy, we propose that the demographic composition of a gender equity advocacy coalition matters: Men-only groups lack coalition legitimacy, or the perception that they are the “right” spokespersons for gender equity issues, whereas women-only groups struggle to convey issue legitimacy, or the perception that gender equity is of strategic importance within business organizations.

“Mega-threats”—negative, identity-relevant societal events that receive significant media attention—are frequent occurrences in society, yet the influence of these events on employees remains unclear. We draw on the theory of racialized organizations to explain the process whereby exposure to mega-threats leads to heightened avoidant work behaviors for racial minority employees.

Why do firms offer non-wage compensation instead of the equivalent amount in financial compensation? We argue that firms use nonwage benefits, specifically female-friendly benefits, such as maternity leave, to increase gender diversity by efficiently attracting women.

Stakeholder Capitalism

UNC Kenan-Flagler Business School Professor Al Segars and co-author Anselm Beach have written about their new model for developing diversity, equity and inclusion in an organization, the Values/Principles Model, in the most recent issue of the MIT Sloan Management Review. At a time when recognition of DEI’s benefits has become widespread, their approach gives leaders the tools to create real change that will allow their whole companies to prosper. Learn more by clicking below.

Mark Little, executive director of the Kenan Institute-affiliated center CREATE, provided expert testimony in a process that resulted in a May 11 settlement agreement regarding contracting and hiring practices for Dominion Energy’s $9.8 billion Coastal Virginia Offshore Wind renewable energy project.

Kenan Scholars Director Kim Allen is among the winners of UNC’s annual Diversity Awards, presented to individuals and groups who have given their time and effort to further diversity, equity and inclusion at the university and in its surrounding community.

We examine the effect of pay transparency on gender pay gap and firm outcomes. This paper exploits a 2006 legislation change in Denmark that requires firms to provide gender disaggregated wage statistics. Using detailed employee-employer administrative data and a difference-in-differences and difference-in-discontinuities designs, we find the law reduces the gender pay gap, primarily by slowing the wage growth for male employees.