Board experiential diversity and corporate radical innovation

• 成果类型: Article
• 署名作者: Genin, Aurora; Ma, Wenting; Bhagwat, Vineet; Bernile, Gennaro
• 署名单位: Indiana University System; Indiana University Bloomington; University of Massachusetts System; University of Massachusetts Amherst; George Washington University; University of Miami
• 刊物名称: STRATEGIC MANAGEMENT JOURNAL
• ISSN/ISSBN: 0143-2095
• DOI: 10.1002/smj.3499
• 发表日期: 2023
• 页码: 2634-2657
• 关键词: board advising; experiential diversity; instrumental variable; panel data; RADICAL INNOVATION

摘要

Research Summary: How does board experiential diversity affect corporate radical innovation? We find that the combined diversity of directors' educational, industrial, and organizational experiences spurs the quantity and quality of path-breaking patents developed at a firm. Instrumental variable analysis leveraging exogenous variation in firm access to the nonlocal supply of directors with diverse experiences indicates causality, which is corroborated by difference-in-differences tests. Firm heterogeneity suggests experientially diverse directors spur radical innovation by better serving the firm's advisory needs rather than via improved governance. Our findings enrich theoretical insights into how corporate board leadership may affect innovation and long-term value creation at the firm.Managerial Summary: This study offers practical guidance on director recruitment. Board directors with diverse educational, industrial, and organizational experiences can support the invention of radical technology. This type of innovation can create substantial economic and social value. Noting the benefits of diverse experiences in the boardroom, corporate executives can search beyond the traditional director pedigree (e.g., Ivy League-educated financiers), where female and minority individuals remain underrepresented. In doing so, the firm can find more qualified candidates to assemble a demographically and intellectually diverse board, thus cultivating an inclusive corporate culture conducive to shareholder and stakeholder value creation.