The Faculty Lounge: What’s The Return On Equality: Darren Rosenblum On Examining Diversity

Kim pushed us on the real value of diversity, and I relish that she is interested in pushing this line of thought. I share this skepticism about the presumption that diversity is good without further detail as to why. On this question, I have three points: 1) near term v. long term value of diversity drawing on our study; 2) a theoretical engagement with the value of diversity, following Scott Page’s work and 3) the crucial difference between mixité and diversity.

Whether mixité affects decision-making

More than a Woman: Insights into Corporate Governance after the French Sex Quota, co-authored with Daria Roithmayr, draws on interviews of men and women board members of a third of France’s CAC 40 firms. We conclude that as women join the board, the process of board deliberation may change. The interviewees report that women discuss matters in a more methodical fashion, and their doing so encourages men to follow suit. However, many interviewees treated the notion that men and women would vote differently as preposterous. They reported that the inclusion of women would not change substantive decisions, that that men and women are not “as different as the sun and the moon,” that they would make the same substantive choices without regard to their sex. When considering the positions of individuals within boards, of boards within firms and of firms within markets, board members’ experience would define their choices around market expectations. This reality may reduce the extent of diversity’s effect on boards. Two other points here: first, workers have representation on many European boards, which does lead to more diverse perspectives, but for different reasons. Second, our article concludes that the outsiderness of new board members may ultimately play a role in reshaping the board. Over the long term, the inclusion of a more diverse pool of candidates may lead boards to shift their outlook and even their choices.

How diversity matters

When thinking about Kim’s question, “why diversity matters” answer sits with Scott Page’s work. Daria shared his work The Differencewith me, and it’s completely changed my understanding of how diversity functions and why it matters. In the book, Page reviews a variety of different economic and social science studies on diversity and concludes that diversity matters in certain contexts but not in others.

According to Page, a dichotomy exists with regard to linking diversity with better results, a dichotomy that depends on the nature of the work itself rather than on the nature of the diversity. If the work involves some creativity, the presence of a diverse group of individuals will help arrive at a more effective result than one individual exercising her predictive powers. However, when the work is repetitive or involves implementation, diversity will matter less, and may even prove counterproductive. Problem solving involves distinct capacities from routine tasks, and that distinction is the one on which diversity’s import hinges. For a team of burger flippers, diversity matters little, but in designing the layout of the burger joint it might matter more. The question surfaces whether corporate board work is creative or repetitive and while most would presume the former, I think the question is still a legitimate one to pose. Where boards play a principally responsive function in relation to the executive, it may be the case that their work involves less creativity. Jonathan Macey has argued that the board should become more “managerial,” and where this occurs, the presence of a diverse group of individuals will help arrive at a more effective result.

One relevant factor here is the distinction between diversity and mixité. Page’s work on diversity maps distinct types of diversity, including sex diversity. Thus, even though in a French context we would normally distinguish between mixité and diversity, when applying Page’s work to the FCBQ, the type of diversity should matter less.

Mixité or diversity

Last, a note on mixité, a French word that means sex diversity. When we talk about diversity we mean something much more general: it could mean the traditional identities around race, ethnicity, nationality, sexual orientation, ability, or other identities. The SEC’s rule, as Aaron Dhir discusses, does not define diversity. Nor does Page define it. Part of the reason Kim’s question doesn’t fully map onto the quota debate is the fact that mixité focuses on one axis of difference, which is both easier to grasp and to measure. I wonder if mixité’s focus on one axis of difference renders it more effective than broader diversity efforts. In addition, this particular identity carries substantial weight in the French context, where a quota has existed since 2000 for women to comprise half of all candidates for public office. French people accept the legitimacy of the sex binary, as I discussed in my Parity/Disparity article. The sex binary performs part of the work of the corporate board quota: a remedy for inequality that targets a difference perceived to be real invites compliance. I realize this point opens up some compelling and even concerning issues about the relationship between mixité and other kinds of diversity. While I cannot address all of those points here, it’s worth noting that in the More than a Woman study, several interviewees conveyed that other kinds of diversity might benefit from the quota.

The “What’s The Return On Equality?” Mini-Symposium:

What’s The Return On Equality? A Conversation About Board Diversity

What’s The Return on Equality?: Aaron Dhir on Quotas

What’s The Return On Equality: Kim Krawiec On The Business Case For Board Diversity

What’s The Return On Equality: Lisa Fairfax on Board Diversity’s End Game

What’s The Return On Equality: Darren Rosenblum On Quotas

What’s The Return On Equality: Daria Roithmayr

What’s The Return on Equality: Aaron Dhir On Disclosure

What’s The Return On Equality: Taking Stock of Day 1

What’s The Return On Equality? Lisa Fairfax on Board Vacancies: The Cure and the Problem?

What’s The Return on Equality: Aaron Dhir Responds To Questions

What’s The Return On Equality: John Conley Responds To Daria Roithmayr