We ask when and how a diverse board can benefit shareholders. Board diversity may be value-increasing even if some directors have agendas that are not perfectly aligned with shareholders' interests. Diversity commits the board to a high information standard because directors with opposing...

Diverse boards have been seen as providing impetus for initiating change. However, diversity may introduce conflict and impede decision-making, which could hinder the ability of the firm to make strategic change, especially in times when firm performance is low. Integrating threat-rigidity...