If we want better governance ... diversity promotes greater vigilance and lessens the threat of groupthink.

• Author: Gorte, Julie Fox
• Position: Brief article

AS A LONGTIME board diversity advocate, I have heard every argument against it, and most come down to skepticism over the ability of women to do a better job of governance than men. The question implicitly assumes that today's male-dominated boards do a good job. Clearly, many don't.

Pax World has surveyed the academic literature on the financial impact of board diversity, and the majority of the studies reviewed supported the case that gender diversity is positively correlated with financial performance. The Corporate Library used the academic literature to explore why this would be the case, and reported two suggestive findings: gender-diverse boards "promote greater vigilance over financial reporting," and "diverse groups are less likely to share common assumptions that can lead to unreflective groupthink."

This is persuasive in the U.S., where most boards are also chaired by the CEO. Many academic studies also conclude that entrenched boards also are more likely to have exceptionally generous executive compensation that is less tied to robust measures...