Blacks earn less than whites in management positions at publicly traded companies

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Racial inequality in the country, with a low representation of the black population in various spheres of Brazilian society, is also reflected in the Stock Exchange.

A study conducted by Insper’s Nucleus of Racial Studies showed that, especially in high-ranking positions, the percentage of black people in companies listed on the Brazilian Stock Exchange is still quite low —considering the composition of the boards of companies that are part of the Ibovespa, only about 9.5% are black, rising to 23.5% when it comes to management positions.

When considering the other positions within the companies, the percentage of blacks rises to 41.3%.

For the preparation of the study, data from the Annual Social Information List (Rais) between 2008 and 2017 were considered.

Researcher at Insper, co-responsible for the survey and columnist for Sheet, Michael França states that it is possible to notice a small advance in the occupation of leadership positions by the black population in the period, but still very slowly. In 2008, black people occupied about 4% of director positions in companies and 16% when it comes to management.

The Insper survey also points out that blacks receive lower wages than whites within the same occupation group. On the boards of listed companies, black people receive, on average, 75.5% of the salary of a white person.

This percentage is 68.2% in management positions, and 57.3% for other functions of companies with shares traded on the Brazilian stock exchange.

França states that the retroactive analysis of data since 2008 indicates that there has been no significant improvement in inequality in terms of remuneration of the black population in relation to whites among the companies on the Exchange.

“We see a slow inclusion process over time in boards and management, but we don’t see a trend of improvements in compensation.”

The study also indicates that black women occupy the smallest space within companies listed on the Stock Exchange, with only 16.5% of the total. Next come white women, with 22.9%, closely followed by black men (23.7%). White men make up 30.1% of the total.

“There are companies that only hire minorities of trainees or interns, just to say that they are taking some action in this sense to improve their image, but that, when we analyze it more deeply, do not have any active policy of trying to improve diversity in positions at a higher hierarchical level”, says França.

The researcher points out that the result of the study can be attributed in part to the practice known as indirect discrimination, when there is no conscious prejudice on the part of the company or the recruiter, but rather the indication, by high-income white men, of candidates with a profile similar to yours, given that they are the people in your social circle.

“We live in a very segregated society. The mechanism of indirect discrimination helps to generate a low diversity in some occupations that have a higher level of qualification and pay more.”

Scholarship proposes practice to increase diversity in boards of directors and boards

Director of issuers at B3, Flavia Mouta says that it is necessary to recognize that today the top leadership of companies in general does not reflect the representativeness that exists in Brazilian society.

“We have a legacy of inequality that needs to be addressed and not just with speech. People from minority groups bring diversity of opinions and this adds value within companies”, says the director of B3.

Among the actions taken by the company responsible for the Brazilian Stock Exchange, Flavia mentions the proposal presented by B3 in August for the adoption by listed companies of a mechanism known as “practice or explain”.

The intention of the project is that companies with shares traded on the Stock Exchange have at least one woman and one member of minority communities (black or brown people, members of the LGBTQIA+ community or people with disabilities) on their board of directors or statutory board within two years from the effective date of the rule. It is expected to come into effect in early 2023.

If the company does not make progress in this regard within the stipulated period, it will have to indicate to the market and investors in general the reasons that made advances unfeasible.

A survey by B3 points out that, of the approximately 420 companies listed on the Brazilian Stock Exchange in 2022, approximately 60% do not have any women among their statutory directors and 37% do not have female participation on the board of directors.

“We are talking about increasing the value of these companies through the diversity of opinions and also to serve as a mirror for those at the bottom to be able to see themselves in the top leadership”, says the director of B3.

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