Does Board Diversity Matter? The Impact of Actual and Perceived Human Capital Diversity on Board Process and Performance

This article builds upon team effectiveness and governance theories to explore the mediating role of board processes in the relationship between board job-related diversity and board strategic involvement. Empirical tests based on primary survey data from the largest Italian firms show that board human capital diversity is a valuable resource enhancing board strategic involvement and subsequent firm performance. Our results illustrate that both perceived and actual board diversity can contribute to board strategic involvement by influencing board processes such as effort norms, use of knowledge and skills and cognitive conflict. However, while actual board human capital diversity influences perceived human capital diversity, both types of diversity have differential effect on board process and performance. We discuss implications for practice and future research.