The MBA degree and the astronomical rise in CEO pay

12.18.2014 Accounting, Article, Faculty News, General

This story in Fortune examins how companies’ top-ranks are filled with talent from similar educational backgrounds. It suggests uniform thinking could be playing a part in the CEO pay gains over the past few decades. This similarity raises concerns about diversity. The story highlights research from Ya Wen Yang, assistant professor of accounting at the School of Business.

There’s little research on the impact of the number of MBAs in the boardroom, but a growing amount of evidence suggests that a lack of diversity can hurt a company. In a study currently undergoing peer review, researchers found a significant link between board diversity and willingness to take on risk.

“We found that the more diverse the board, the less likely [a company is willing] to take risk,” said Ya Wen Yang, assistant professor of accounting at the Wake Forest University school of business and a co-author of the study in question. “If you want to curb excessive risk taking, then add diversity to the board.”

Yang adds that there’s early evidence that diverse boards are more willing to provide investors with dividends or give money back to shareholders.

Read the full story at Fortune.