Diversity as a Catalyst for Moderating Directors’ Excessive Remuneration: Towards a Stakeholder-Centric Approach

Contemporary business discussions increasingly emphasise the role of diversity in corporate leadership, highlighting its positive impact on organisational performance. While the benefits of diversity in fostering innovation, enhancing decision-making, and improving corporate culture are widely acknowledged, this article explores the relationship between diversity and remuneration practices.Specifically, it critically examines diversity in corporate culture and its role in mitigating excessive remuneration. In the realm of corporate governance, the article asserts that diversity is crucial in addressing the issue of excessive executive pay. Investigating drivers and trends in internal governance, it challenges perceptions and analyses executive motives. It argues that diversity, particularly in boardrooms, significantly influences and improves executive pay policies, leading to more equitable and effective compensation structures.This article examines diversity’s positive impact on corporate performance and culture by reducing groupthink and promoting diverse perspectives. It critically assesses the regulatory setting, identifies gaps, and proposes changes for more inclusive remuneration practices. Additionally, it discusses theories and legal frameworks governing executive pay, advocating for a stakeholder-centric approach that aligns with sustainable organisational goals. By leveraging diversity, this research highlights the importance of a shift towards balanced and sustainable remuneration practices.