The Advantages of a Diverse Board

There’s little question that the executive suites and boardrooms of America’s top companies have diversified over the past two decades. Plenty of research shows the increasing differences in gender, ethnicity, social class, and cultural background of directors and corporate officers at large firms. Proponents of diversity in business argue that minority leaders can provide unique insights and broaden their firms’ knowledge networks, bringing their varied perspectives to bear on the complex decision-making process that occurs at the board level.

However, most of these studies have focused on how diversity at the apex of a company can show up in relatively broad measures of corporate performance, such as stock returns in the wake of a minority executive’s appointment or the perceived ability to employ a more multicultural workforce. As a result of this wide-angle view, the findings have been fairly ambiguous and inconsistent.

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