Diversity in Corporate Boards and Firm Outcomes

We examine the relationship between firm performance and diversity among corporate directors, proxied by diversity along religion and caste, a deep-rooted institution that divides India's Hindu society into hundreds of communities. To identify directors' caste, we build the first data-driven mapping of last names to religion and caste at different levels of granularity. Indian corporate boards strikingly lack diversity during 1999-2015. We show that lack of board diversity is negatively related to firm performance and value. We find the strongest negative relation for the finest caste measure, along which mindsets are likely most similar, reinforcing the importance of the granuality at which diversity is measured