Appointment of racial/ethnic minority directors: Ethnic matching or visibility threat?

Abstract

The purpose of this study is to identify the industry and community-level compositional factors that influence the appointment of racial/ethnic minorities to corporate boards. We derived hypotheses from two theoretical perspectives: ethnic matching and visibility threat. Our analysis relied on data from seventy-three Standard & Poor's 500 companies between 1980 and 2000. We find important differences between and among racial/ethnic groups in terms of the mechanisms that shape board appointments. Consistent with the ethnic matching perspective, we find that the representation of Black and Hispanic board directors is strongly predicted by the racial/ethnic composition of the industry's labor force. Contrary to the visibility threat perspective, however, we find that the appointment of Asian directors is strongly predicted by the ethnic composition of the community where the firm is located.