••• dei research

Does board diversity lead to innovation?

While gender, racial and ethnic diversity bring value to U.S. companies, research from the Indiana University Kelley School of Business found that the presence of diverse educational, industrial and organizational experiences among managers and board members leads to R&D innovation that creates economic and social value.

The researchers reviewed a sample of more than 11,000 observations of 971 firms with one or more patent applications between 1996 and 2014. “We looked at [board members’] experiences and not just their demographic background – the more functional aspect of diversity. We looked at outcomes and found radical innovation when directors had more diverse experience, helping to guide firms toward more cutting-edge exploration and success,” says Aurora Genin, assistant professor of management and entrepreneurship and co-author of the article “Board experiential diversity and corporate radical innovation” in Strategic Management Journal.

Further, corporate leadership that includes people from educational backgrounds other than business and finance might be less myopic when facing uncertainty. “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,” Genin and her colleagues wrote. “In so doing, 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.”

••• the business of research

When managers unplug, everyone benefits

Managers who disconnected from their jobs at home felt more refreshed the next day, identified as effective leaders and helped their employees stay on target better than bosses who spent their off hours worrying about work, according to the study, “The importance of leader recovery for leader identity and behavior,” published in the Journal of Applied Psychology.

Researchers surveyed managers and their employees at U.S. businesses in 2019 and 2022 to assess leaders’ ability to disconnect from work at home the night before and their level of energy and how strongly they identified as a leader in the morning at work. Employees rated their bosses on their leadership ability.

“When leaders completely turned off at night and didn’t think about work, they were more energized the next day and felt better-connected to their leadership role. On those same days, their followers reported that they were more effective in motivating them and in guiding their work,” says Klodiana Lanaj, a professor in the University of Florida’s Warrington College of Business who led the research.

“But on nights when leaders reported that they were thinking about the negative aspects of work, they couldn’t recuperate their energy by the morning. They saw themselves as less leader-like and weren’t as effective, as rated by their followers,” she says.