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 We argue that the dominance of principal-agent theory as an approach to investigating executive pay has led to an overly narrow focus which may be unhelpful when considering cross-country differences and probably also hinders within-country analysis. The paper discusses the interlinked nature of three available theoretical lenses, namely principal-agent, executive power, and stewardship/stakeholder theories. It argues that institutional theory can provide a useful overarching framework within which appropriate variants of these approaches can be deployed to better comprehend developments in executive pay. We illustrate our approach with a discussion of executive pay in the UK and in Germany.

This article uses UK data to examine issues regarding the scarcity of women in boardroom positions. The article examines appointments, pay and any associated productivity effects deriving from increased diversity. Evidence of gender‐bias in the appointment of women as non‐executive directors is found together with mixed evidence of discrimination in wages or fees paid. However, the article finds no support for the argument that gender diverse boards enhance corporate performance. Proposals in favour of greater board diversity may be best structured around the moral value of diversity, rather than with reference to an expectation of improved company performance.

Manuscript Type: EmpiricalResearch Question/Issue: This study questions the adequacy of the agency approach in representing how remuneration committees design executive pay arrangements. Research Findings/Results: Using evidence collected from interviews conducted in late 2006, with 22 members of various UK remuneration committees, we find that concerns with legitimacy push remuneration committees towards an institutional isomorphism in processes and practice. Theoretical Implications: Any interpretation through an agency lens of the design of executive remuneration as being a key component in the toolbox of strategic human resource management needs to be qualified by considerations of neoinstitutionalism. There is scope for a melding of the two approaches. Practical Implications: The fulfillment of the expectations placed upon the remuneration committee necessitates an adequate allocation of time and resource plus self-awareness on the part of the committee of the inherent tendency to follow the norms, rules of thumb, and customary practice of others. The remuneration committee chair emerges as a pivotal actor, and this position merits being treated as a weighty and onerous appointment, possibly on a par with that of the chair of the audit committee.