While the boardrooms of plc companies continue to be dominated by male directors the few female directors who are appointed will find the experience unsatisfactory unless perceptions of their contribution to company performance change.

Equal pay still eludes women in the boardroom

New research by academics at the University of Exeter has discovered that female executives earn smaller performance-related bonuses than their male counterparts.

The median total remuneration of the women in the study – including bonuses – was £257,000 a year, 19 per cent less than the £316,000 paid to the men.

The study showed that women are rewarded by a significantly lower bonus when the company is doing well but they are also punished less when company performance is poor.

Dr Clara Kulich, the lead author commented ‘Men tend to be more confident and will go for a pay package that increases a lot when the company does well, whereas women don’t want to earn much less if it does badly.’

This could have a significant impact on the future prospects of women directors by reinforcing a mind-set that believes because they tend to earn less, they are somehow inferior to men in the boardroom.

The study concludes that this ‘’organisational insensitivity…can also be regarded as a lack of respect for women leaders by communicating and promoting the view that female executives lack impact in the workplace. As long as this is denied, the experiences of women who break through the glass ceiling are likely to prove highly unsatisfactory for them.’’

The research was carried out by academics from the University of Exeter Business School and the School of Psychology. It was presented at the annual meeting of the US Academy of Management.

Date: 28 August 2008

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