Utilizing Tax Incentives to Increase Gender Parity on Corporate Boards

Utilizing Tax Incentives to Increase Gender Parity on Corporate Boards

Women are drastically underrepresented in positions of power and prominence in the United States. As of 2021, women hold only thirty percent of board seats on the S&P 500. The number is much smaller for private corporations. One study found that in 2020, women occupied only eleven percent of board seats for private corporations. Given these statistics, it is unsurprising that a 2021
study predicts that corporate boards will not reach gender parity until 2032.

This underrepresentation matters for several reasons. First, the lack of gender equity on corporate boards is blatantly sexist. This disparity should matter for anyone who wants to reduce societal inequalities. Second, boards with high female representation are correlated with better outcomes for workers. Notably, there is a positive correlation between boards with high female representation and an increased receptiveness to workers’ needs. Third, gender-equitable boards help corporate stocks. This is attributed to higher returns on equity and better stock price informativeness.6 Lastly, having more female-led companies may reduce economic recessions. Research on the 2008 financial crisis indicates that banks run by men took more risks than banks run by women, leading to a financial recession.

Mary Tursi