Diversity on corporate boards is an urgent priority, emphasized by company leaders and public policy agendas. For example, in 2021 the U.S. Securities and Exchange Commission approved a rule requiring most companies on the Nasdaq exchange to have at least two directors from underrepresented groups—minority, female, or LGBTQ+—or to explain why they don’t. Such initiatives are laudable not only for reasons of fairness: Research shows that heterogeneity in groups boosts the quality of decision-making. Yet little evidence has persuasively linked increased board diversity with improved firm outcomes. A new study explores why and suggests conditions that can help.
A version of this article appeared in the July–August 2022 issue of Harvard Business Review.
