How Does Firm Size and Sector Impact Female and Minority Representation

Abstract

Gender and racial differences exist in many sectors of employment. Although diversity in gender and ethnic representation is low at the managerial level, the proportion of women in senior executive positions is significantly lower with 6% of all CEOs in 2019 being women. Additionally, 5% of Fortune 500 CEOs are Hispanic, Black, or Asian. There is limited research on the effect a firm’s sector, size, and performance have on female and minority representation. This paper analyzes the decisionmakers of Fortune 500 firms to determine what relationship exists between diversity and firm characteristics. We find evidence that the proportion of female decisionmakers can be partially explained by firm characteristics. We find evidence that the percentage of female decisionmakers increases with the size of the firm. We do not find similar results when measuring diversity as the percentage of minority decisionmakers or the probability that the firm has non-white female decisionmakers. Further, we find strong evidence that the diversity of firms in the energy sector is statistically significantly below average.