Board diversity has long intrigued practitioners and scholars. Constituents encourage companies to vary of director characteristics, but companies often resist. Academics debate whether diversity is beneficial for board decision-making and the empirical evidence is mixed, partly because “diversity” is treated as a singular construct despite representing many different forms (e.g. demographic, human capital and social capital). We propose a theoretical model of board diversity at the group level and within individual directors to predict how various forms of diversity influence board monitoring and resource provision. We suggest some forms of diversity are complementary while others are substitutes when influencing these important outcomes. The implications of our model are important for further work on board diversity, board performance, and public policy aimed at diversity objectives.
Diversity of what? Multifaceted Boards and Directors
ZATTONI, ALESSANDRO
2012
Abstract
Board diversity has long intrigued practitioners and scholars. Constituents encourage companies to vary of director characteristics, but companies often resist. Academics debate whether diversity is beneficial for board decision-making and the empirical evidence is mixed, partly because “diversity” is treated as a singular construct despite representing many different forms (e.g. demographic, human capital and social capital). We propose a theoretical model of board diversity at the group level and within individual directors to predict how various forms of diversity influence board monitoring and resource provision. We suggest some forms of diversity are complementary while others are substitutes when influencing these important outcomes. The implications of our model are important for further work on board diversity, board performance, and public policy aimed at diversity objectives.
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