Board diversity of industry expertise: impacts on strategic change and product markets

Yang Fan ()
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Yang Fan: Colby College

Review of Quantitative Finance and Accounting, 2024, vol. 62, issue 2, No 2, 447 pages

Abstract: Abstract We provide evidence that board diversity of industry expertise leads to internal strategic change at the firm level. We base our diversity of expertise measure on the extent to which corporate director industry backgrounds vary from each. We find that greater diversity of expertise can lead to strategic change, as well as more differentiated products. However, we also find that the benefits from board diversity is moderated by the CEO’s own background. Firms with CEOs that have more general managerial abilities, benefit less from board diversity while CEOs with more specialized abilities, benefit more from board diversity.

Keywords: Strategic change; Corporate boards; Capital investments; R& D; Product differentiation; L11; G34; G31 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s11156-023-01206-8

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