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Research Bits
Diversity—Diversity on the board matters in terms of profitability. The study measured diversity by determining the number of board members who were not insiders, and whether the board composition included a woman or a person of color.
Across the 92 companies in the study, larger boards (10 or more members) were profitable significantly more times than smaller boards (six or fewer members). What’s more, when a person of color was a board member, those companies were profitable significantly more times than companies that had no representation from persons of color.
Female representation on the board also made a difference. While having a female board member did not ensure profitability, companies without a female board member were significantly more likely to be unprofitable.
On balance, greater diversity appears to be favorably related to profitability.
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