MIT Sloan Management Review Article on How Diversity Can Boost Board Effectiveness

Over the past two decades, U.S. corporate boards have become increasingly more diverse as company shareholders and stakeholders have made it clear that they expect diversity in boardrooms. In addition to expertise, experiences, and other factors, that diversity also includes gender, racial, and ethnic diversity. Many companies are making tremendous progress, and a 2020 analysis identified 200 companies with greater than 40% diversity — nearly four times the number of companies a decade ago. However, a new report shows that new appointments of first-time directors, women, and underrepresented racial minorities slowed in 2022, perhaps influenced by economic and political uncertainty.

Now more than ever, there’s work to be done when it comes to demonstrating the effectiveness of diverse boards. While some studies reflect a positive relationship between board diversity and financial performance, others have found limited or no relationship.

About the Author

Stephanie J. Creary is an assistant professor of management and faculty fellow of the Coalition for Equity and Opportunity at The Wharton School. She is also a visiting faculty fellow in the inaugural cohort of the Harvard Business School Institute for the Study of Business in Global Society and has been selected for the Thinkers50 Radar Class of 2023. Janet Foutty is the executive chair of the board of Deloitte US. She has held this role since 2019, after having served as chair and CEO of Deloitte Consulting LLP, where she led the digital transformation and growth of the business and steered Deloitte’s diversity, equity, and inclusion efforts. Kwasi Mitchell is chief purpose officer of Deloitte, responsible for leading the organizationwide strategy that powers the company’s commitment to purpose and drives a broader impact for clients, people, and communities.

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