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  • This research examines the relationship among Board Diversity, Social Capital, and Governance Effectiveness by asking, “does board ethno-racial diversity moderate the relationship between Social Capital and Governance Effectiveness, and if so, how?” Exploring the direct and interacting effects of demographic diversity and Social Capital, and their relation to governing-group effectiveness using a two-sample field survey design, we illustrate whether heterogeneous or homogeneous group compositions amplify or attenuate Governance Effectiveness, and to what degree. Primary analyses find no support for Board Diversity moderating the Social Capital-Governance Effectiveness relationship, with secondary analysis revealing a more complex interaction for Governance Effectiveness, albeit inconsistently, across samples. Our investigation points to the value of social resources in understanding governance as an inherently socially complex activity or capability, predicated on truce or mutual agreement and shaped by the composition and connections of boards.

  • The need for greater diversity among organizational leaders and directors remains a challenge for organizations within the third sector, and beyond. This study examines diversity through a critical mass lens; that is, we examine an alternative approach to understanding the relationship between the ethno-racial composition of boards of directors and their perceived ability to engage stakeholders, improve organizational responsiveness, and effectively manage fiduciary responsibilities. Our study, drawing on a survey of 247 boards, clarifies the need for a critical mass approach to leadership diversity by highlighting the uneven impact of diversity on performance demonstrated by periods of accelerating and decelerating effect. We find that boards achieving a critical mass of ethno-racial diversity improved board performance among three governance activities—fiduciary performance, stakeholder engagement, and organizational responsiveness—with our critical mass approach illustrating the uneven impact of diversity on performance for each governance activity.

  • Our contribution lies in exploring loci and reach of leadership diversity’s influence on proximal and distal performance outcomes to understand how and where these can be mobilized. Our moderated-mediation modeling decomposes the direct, indirect, and interaction effects of demographic diversity among three types of focal actors in governance—Boards (gender-, age-, and ethno-racial variety), Board Chairs (gender and ethno-racial demography), Chief Executives (gender and ethno-racial demography)—on five factors reflecting functional and social dimensions of Board Performance and two dimensions of Organizational Performance. We demonstrate that the Board composition affects proximal board performance outcomes, whereas CEO demography is more related to distal organizational performance outcomes. Board Chairs, a less-examined aspect of nonprofit governing, stand out as bridging both proximal and distal outcomes, both directly and through their interactions with Board diversity and CEO demography.

Last update from database: 12/11/24, 6:50 PM (UTC)

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