In this article, we report the results of a series of interviews with corporate directors about racial, ethnic, and gender diversity on corporate boards. On the one hand, our respondents were clear and nearly uniform in their statements that board diversity was an important goal worth pursuing. Yet when asked to provide examples or anecdotes [...]
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Women now make up a sixth of corporate board members in the Fortune 500. Some scholars suggest that women board members boost financial performance, and thus stock price, by making boards more effective. Indeed, early studies showed a correlation between women on boards and both profits and stock price. But more rigorous studies have suggested that women [...] Those who seek greater gender or ethnic diversity on corporate boards of directors work under the self-imposed burden to show that board-level diversity adds value to the firm in some tangible way. In a perfect world, board diversity follows naturally from the fair distribution of talent and skill between the genders and among ethnicities when [...] Recently, board diversity advocates have relied on market- or economic-based rationales to convince corporate America to increase the number of women and people of color in the boardroom, in lieu of moral or social justifications. This shift away from moral or social justifications has been deliberate, and it stems from a belief that corporate America [...] Some observers suggest that diversity on corporate boards of directors will lead to new perspectives and hence better decision-making by the board. It would seem to follow that improved decision-making will lead to better corporate performance and thus presents a “business case” for increasing diversity on corporate boards. This essay explores the limits of the [...] In this Article, we point out that advocates for board diversity in public companies feel pressure to justify it in terms of its contribution to shareholder value. This pressure is not surprising, insofar as the dominant social identity of boards, which itself is partly a creation of the discipline of finance, views shareholder value as [...] In Grutter and Gratz (2003), the twin cases that challenged the University of Michigan’s affirmative action programs, corporate America praised educational diversity as a compelling interest. But as is well known, they did so not on social justice grounds but on the empirical claim that “diversity is good for business.” In particular, education in a [...] During the Senate’s closed confirmation hearings on President Dwight D. Eisenhower’s nomination of George E. Wilson, President of General Motors, to be Secretary of Defense, a senator asked Wilson if he would be able to make decisions as Secretary of Defense that were adverse to General Motors’ interest. Wilson replied that he would, but added [...] Diversity initiatives are commonplace in today’s corporate America. Large and successful firms frequently tout their commitments to diversity, sometimes appointing women and racial minorities to highly visible posts, including seats on their boards of directors. Why would a profit-minded firm engage in such behavior? One frequently voiced explanation is that by creating such diversity, firms [...] What do companies signal when they showcase female and minority members of their corporate boards? Not necessarily more, say Patrick Shin and Mitu Gulati, than that they understand that diversity is a socially significant issue, and that they can attract members of the showcased individual’s minority group, against whom they are then probably disinclined to [...] |
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