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Moderating biases

20 September 2021

The article at a glance

Female representation on compensation committees reduces bias toward deep masculine voices in CEO pay, finds study in the Journal of Management Studies co-authored by Cambridge Judge Business School alumnus Waqas Haque.

Female representation on compensation committees reduces bias toward deep masculine voices in CEO pay, finds study in the Journal of Management Studies co-authored by Cambridge Judge Business School alumnus Waqas Haque.

Highlighting the importance of gender differences in the board room, a new study co-authored by an alumnus of Cambridge Judge Business School finds that female representation on company compensation committees reduces a bias that leads to higher early-tenure pay for CEOs with deep masculine voices. The study challenges the ‘fallacy’ that evolved biases are deterministic.

Previous research has illustrated how biases play an important role in shaping the perceptions and decisions of corporate leaders, while other studies suggest that vocal masculinity (“the perceived deepness or lowness of an individual’s voice”) can bias perceptions of leadership quality.

“However, vocal masculinity has not been found to predict actual leadership quality in the present day, suggesting the existence of an evolutionary mismatch, whereby physical strength signals continue to bias perceptions in modern contexts although modern conditions differ substantively from ancestral conditions,” says the new study. “This misunderstanding is a manifestation of the widely-held view, common even among scholars, that if something is evolutionary in nature, then it is impervious to change. This line of reasoning is known as the deterministic fallacy”.

The study published in the Journal of Management Studies is entitled “It’s not what you say, but how you sound: CEO vocal masculinity and the board’s early-stage CEO compensation decisions”.

The study is based on CEO pay at UK companies listed in the FTSE 100 index from 2004 to 2013, focusing on the first three years of a CEO’s tenure because the relative lack of performance information during a CEO’s early years heightens susceptibility to cognitive biases. The study looks at total CEO compensation, including salary, bonus, long-term incentive plans, options, and restricted stock grants. It measures CEO vocal masculinity using “formant dispersion”, which references a speaker’s frequency band spacing and perceptions of voice deepness or lowness. While other markers of vocal masculinity can be manipulated to garner greater influence in competitive situations, formant dispersion is determined by the length of one’s vocal tracts (with longer tracts producing deeper voices) and generally uninfluenced by age once an individual reaches adulthood.

The study originated as a thesis by co-author Waqas Haque while he was studying for his MPhil in Innovation, Strategy and Organisation at Cambridge Judge Business School (MPhil 2014). The research was then reshaped into a journal article by the study’s three co-authors: Krishnan Nair, who earned an MPhil in South Asian Studies at the University of Cambridge (Cambridge Judge Professor of Marketing Jaideep Prabhu supervised his thesis) and is now at the Kellogg School of Management at Northwestern University; Waqas Haque, who pursued a career in medicine and is now doing his residency at the New York University Department of Internal Medicine in a Clinical Investigator track; and Steve Sauerwald of the Department of Managerial Studies at the University of Illinois Chicago.

The study’s finding that female representation on compensation committees moderates vocal masculinity bias supports the view that gender differences play an important role in shaping board outcomes. It thus contradicts the view advanced by some scholars that because “the type of men and women who rise to the top of the corporate hierarchy are different from their counterparts in the general population, gender differences are less likely to play an important role in this context”.

The authors say the study could have broader implications beyond early-stage pay for CEOs. “Our findings, which indicate that CEO vocal masculinity is less beneficial for CEOs who head firms in less competitive industries, and for CEOs being evaluated by female evaluators, suggest the possibility that these patterns could potentially extend to evaluations of the CEO by other salient stakeholders including financial analysts and journalists.” The study also suggests that making directors aware that they are likely to be influenced by CEO vocal masculinity while assessing CEO quality could mitigate this bias in board decision-making.