James Fanto, Lawrence Solan, and John Darley build their article, Justifying Board Diversity, on the basis of two essential claims—one legal, the other empirical. The legal claim is that existing law does not much constrain how corporate boards address the (lack of) diversity of their membership. The empirical claim is that board diversity doesn’t increase shareholder value. Based on these two claims, Fanto et al. criticize “diversity advocates” for making the fundamental mistake of justifying increased board diversity on the grounds of increasing shareholder value. What’s worse, this strategy does not reflect diversity advocates’ true values, which are about social justice, not financial self-interest. This is what I call their mismatch critique.
The legal and empirical claims are unobjectionable, and for purposes of this Commentary, I will assume that they are correct. However, the mismatch critique warrants careful unpacking. The strength of this critique turns on whether diversity advocates had or have better options realistically available to them. The authors make modest attempts to suggest a few, but none is systematically defended. In the end, their alternative suggestions are implausible or underspecified, which undermines the force of their mismatch critique.
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