Honors Theses and Capstones

Date of Award

Spring 2022

Project Type

Senior Honors Thesis

College or School

PAUL

Department

Accounting and Finance

Program or Major

Business Administration: Finance

Degree Name

Bachelor of Science

First Advisor

Steve Irlbeck

Abstract

In 2018, the State of California passed Senate Bill 826, requiring that all public companies headquartered within the state have at least one female on the board of directors. Prior literature has identified a significant connection between female board representation and the impact on female executives and their pay. The prominence of female leaders has been shown to enable fellow females to pursue leadership positions. In addition, prior studies have found that female board members have encouraged an increase in female executives, and an increase in female executive pay has been identified due to the role of the board in compensation decisions. This study analyzed the impact of California Senate Bill 826 and the impact on both the number of female executives and the gender pay gap in response to an increase in female members of the board. Using data from California public companies, correlational and graphical analysis will be used to evaluate representation and compensation trends between 2015 and 2020. This study found a substantial impact on the increase in female executive positions, particularly after the announcement of the Bill in 2018. There were also noticed impacts on the pay gap between male and female executives and the reduction in the difference for firms who were not in compliance. Further analysis of this study can be utilized to evaluate the impact of the bill in future years, as there are additional requirements for female board representation based on firm size.

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