An overview of recent studies reveals that the relationship between diversity and financial performance has not been convincingly established. However, there is some theoretical and empirical basis for believing that, when well managed, diversity can improve decision making and enhance a corporation’s public image by conveying commitments to equal opportunity and inclusion. To achieve such benefits, diversity must extend beyond tokenism and corporations must be held more accountable for their progress. This report evaluates the case for diversity on corporate boards of directors in light of competing research findings and suggests strategies to promote more inclusive boards.
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