Who Do You Vote For? Same-Race Voting Preferences in Director Elections

This paper highlights racial and ethnic preferences in corporate director elections. Using a comprehensive dataset of mutual fund voting records, we discover that mutual fund managers are more likely to vote for director nominees who share their racial or ethnic identity. Funds managed by White-dominated teams exhibit the strongest same-race preferences, particularly those in fund families with scarce minority representation. Same-race voting preferences have detrimental implications for the career outcomes of minority director candidates, and are associated with worse fund performance primarily when fund managers operate under weaker accountability. We investigate various potential mechanisms—including statistical discrimination, value maximization, conflicts of interest, social networks, and taste-based biases—and find that the evidence aligns most closely with a taste-based explanation for same-race preferential voting.