Events

Prof. Abhinav Gupta
Professor of Management
Foster School of Business
The University of Washington

Research has found that contenders from upper-class backgrounds are favored for CEO positions over those from humbler origins. However, in the decades since the last analysis was conducted, Corporate America has undergone significant changes that have institutionalized shareholder primacy as the dominant organizing principle. This study examines the implications of these macro-institutional changes. We begin with anticipating a steady amplification of upper-class bias in CEO selection since the 1970s and then examine how inter-firm differences in conformity to shareholder primacy correspond to the heightening of upper-class bias. We hypothesize that firms that have espoused commitment to shareholder primacy in their formal communications or have adopted practices consonant with its tenets will exhibit a stronger preference for upper-class CEO contenders. We then theorize that the influence of shareholder primacy would also manifest through the relative salience of distinct stakeholder groups, hypothesizing that concentrated ownership by affluent shareholders and collective bargaining agreements with unions will amplify and dampen, respectively, the upper-class bias in CEO selection. Using a novel dataset that compares the social class backgrounds of 456 rival candidates who competed in 228 CEO contests from 1970 to 2013, we find considerable support for our hypotheses.