Academic

Wrapping It Up: The Struggle To Explain Why Difference Makes a Difference (Sotomayor And The Value of Diversity, The Final Installment)

By Kim Krawiec

In my prior post on this topic, What Corporate Insiders Say About Why Diversity Matters, I noted that (though our work is still preliminary) our research suggests that corporate insiders appear not to have arrived at a master narrative to explain the pursuit of diversity on boards of directors. Instead, their accounts stress a variety of factors and feature few concrete examples.  Elements of each of the diversity rationales discussed in my post, Money Is Diversity or Diversity Is Money?, appear, but it is largely a theoretical narrative without concrete detail -- a story without substance.  When invited to elaborate, subjects have digressed into instances that had little to do with race or gender, and in fact have often distanced themselves from demographic variables.  And none expressed anything more than a hope that diversity would correlate with business performance.  Despite their focus on the business case for diversity, overall our subjects do not tell that story concretely or consistently, instead falling back on a story that is more similar to ?it seems like a good thing to do.?

And, indeed, it may be.  As noted, the empirical research on board diversity presents methodological hurdles and conflicting results, leaving many questions unanswered.  Accordingly, there?s no empirical consensus on whether board diversity improves firm performance.  All we can say is that, if there is a business case to be made for board diversity, most of our respondents do not make that case with much specificity.

And perhaps this should not be entirely surprising.  After all, I began this series of posts by lamenting the lack of specificity and rigor in most discussions, prompted by the Sotomayor nomination, about the possible role of diversity on the Supreme Court.   And that is a much more familiar institution to most than the corporate boardroom.  Moreover, some diversity rationales ? for example, fairness, representational, and social good rationales -- that feature prominently in discussions of diversity?s benefits in public, educational, or political institutions are more problematic, both practically and theoretically, in the corporate board context.

In closing, a striking summary of boardroom discussions about board diversity came from a white female director with significant experience providing professional advice to corporate boards. The specific question posed was why one particular board had sought diversity. Her account suggests that the business world does not have a well-reasoned board diversity rationale?in fact, in her view, the question of rationale is never even discussed:

I suspect you haven?t gotten many introspective answers on that because, in fact, you?re never going to have a board that will honestly question whether or not there is a value associated with that.  And people will accept it and move on.  Everybody says the same thing because, again, I?m in boardrooms a hundred times a year and I hear the same discussion.  And what they say is we have skill sets that we want and if we can find a diverse candidate who fulfills them without sacrificing the skill sets that we?re looking for that would be terrific.  And the analysis doesn?t go any further.  It just isn?t discussed.  So anything I tell you about why I think diversity adds value is going to be [my] thoughts because it was not a topic of discussion.  [Sentence that identifies company deleted.]  So to the extent we?re talking about sort of that wide swath of middle America, then it?s nice to have a board that is in some respects emblematic of that but we?ve never discussed it.

That concludes my posts in this series.  Thanks for reading, and don?t forget to also read our papers (here and here) on board diversity, which include a much more extensive use of the interview transcripts.  And send us feedback and comments ? despite the work we?ve already done, we still have years of work ahead of us.  As a way of saying ?thanks? for your attention so far, I leave you with this wholly unrelated, but funny, clip on ?Diversity Day? from The Office.

To read my prior posts in this series see:
I.                    Sotomayor, Diversity, And Group Dynamics: Why Do We Care? What Do We Know???
II.                  Do The Right Thing, So Long As It?s Free?
III.                Money Is Diversity or Diversity Is Money?
IV.                 What Corporate Insiders Say About Why Diversity Matters

Full post as published by The Faculty Lounge on September 17, 2009 (boomark / email).