Board Diversity Revisited: New Rationale, Same Old Story?

Abstract:     
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 would better respond to justifications that centered on the corporate bottom line. However, recent empirical data reveals that despite the increased reliance on, and apparent acceptance of, market- or economic-based rationales for board diversity, there has been little change in actual board diversity. This Article argues that the relative stagnation in board diversity can best be attributed to diversity advocates’ overemphasis on the importance of business rationales for diversity, coupled with their failure to acknowledge or otherwise bolster the importance of social and moral justifications for board diversity efforts. As a result, this Article not only concludes that business justifications may be insufficient, at least standing alone, to advance board diversity, but also insists that diversity advocates must pay greater attention to the role of social and moral justifications in the effort to diversify the corporate boardroom.

Number of Pages in PDF File: 33

Keywords: corporate boards, corporate governance, board diversity, board fiduciary duty

JEL Classification: G30, K20, K22

Accepted Paper Series