The Economic Versus Moral Perspective of Board Diversity: A Time for Regulation After the Financial Crisis?

By Markus Stiglbauer and Patrick Velte.

Published by The International Journal of Organizational Diversity

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Article: Print $US10.00
Article: Electronic $US5.00

The recent financial crisis has led to a loss of trust in the quality of corporate governance worldwide. The European Commission (EC) currently intends to regulate board diversity (at first gender diversity) by quota, as companies have not voluntarily met the EC’s expectations on this issue. Considering the political debate, it often becomes obvious that the debate on board diversity is primarily discussed from a moral perspective and on the basis of standard economic arguments or stereotypes, ignoring the majority of empirical findings in this field. Focusing on this gap, we identify very mixed results on the links between different attributes for board diversity and economic outcomes. Furthermore, these empirical findings mainly do not consider important aspects of work psychology and organizational behavior in the black box/closed circle of corporate boardrooms and often only focus on single attributes for board diversity and their direct impact on economic outcomes. Thus, without having a deeper understanding of the processes and dynamics within corporate boardrooms, we do not think this is the right time to regulate board diversity. Additionally, we think such a measure disproportionately intervenes in companies’ authority to staff their boards and neglects companies’ specific (economic) situations.

Keywords: Board Diversity, Economic Perspective, Moral Perspective, Regulation

The International Journal of Organizational Diversity, Volume 12, Issue 2, pp.71-77. Article: Print (Spiral Bound). Article: Electronic (PDF File; 330.604KB).

Prof. Markus Stiglbauer

Professor for Corporate Governance, Head of the Department of Corporate Governance, Institute for Finance, Auditing, Controlling, Taxation, Institute for Management, School of Business and Economics, University of Erlangen-Nürnberg, Nuremberg, Bavaria, Germany

Markus Stiglbauer holds a PhD in Economics and Social Sciences and two master’s degrees in Business Administration and Economics from the School of Business, Economics and Management Information Systems at the University of Regensburg. In 2005 he studied International Business at the Cracow University of Economics (Poland). From 2006 to 2011 he has been a Research Assistant at the Chair for Management and Organization Design at the University of Regensburg where he also received his PhD (summa cum laude) in 2010. In 2010 he was offered a Professorship for Organizational Behaviour at the Technical University of Dortmund and a Professorship for Corporate Governance at the University of Erlangen-Nürnberg (FAU). Since 2011 he researches and teaches at the School of Business and Economics at the FAU. His research focuses on corporate governance, diversity management, value-based management and corporate social responsibility. He is currently researching on information provision of and information integration among supervisory boards, behavioural and performance effects of diversity in top management teams, corporate linkages as well as on sustainability management. He conducts his research within the Center of Valuation and the Center of Management.

Dr. Patrick Velte

Hamburg, Hamburg, Germany