Racial Diversity in Publicly Traded Companies

Racial Diversity in Publicly Traded Companies

Jeffrey Kurt Orlando Thompson, Richard C. Thompson
DOI: 10.4018/IJSECSR.2020070105
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This article shares some of the results of a thesis investigating the relationship between the racial diversity of the board of directors in Canadian companies that traded on the Toronto Stock Exchange (TSX). The central question addressed was how organizational factors affect the racial diversity of board membership. The thesis expanded on a prior study that modelled gender diversity on boards of directors by focusing on the recommended area of racial diversity in the Canadian environment. Though many companies do not share their diversity details, using multiple regression analysis, the results showed that there was more racial diversity on larger boards. From a population of about 3,000 companies, the researchers identified a sample of 148 companies, with all the required parameters. This sample contained 1,246 board members, where 9.4% (117 board members) were visible minorities. The ANOVA analysis of the model demonstrated that it was a suitable tool to conduct the investigation. However, the variables did not show any strong significance.
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Internationally, there are not many studies related to diversity on company boards. There are many countries, such as the United States (US), United Kingdom (UK), and Europe, where authors researched the area of diversity (Thompson, 2019). Additionally, the lawmakers in these countries enacted legislation to protect various disadvantaged groups like visible minorities (Thompson, 2019). Table 1 illustrates the representation of visible minorities on the board of directors' relative to the percentage of the population (Hunt et al., 2018). For example, in multicultural Toronto, monetary, spatial, and social incongruities are imbued with racial implications (Teelucksingh & Poland, 2011). This analysis is essential to understand where Canada stands relative to other countries in the case of visible minorities representation on the board of directors' relative to other countries listed.

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