Companies with diverse bosses have way fewer accidents, but they’re actually a bit less productive.
SSRN · March 18, 2026 · 6431440
The Takeaway
The study found that CEOs who are ethnically different from their peers often feel they have less 'positional power' and compensate by over-prioritizing employee safety. While this leads to significantly fewer accidents, it results in lower operational efficiency, suggesting a hidden trade-off between employee protection and productivity driven by executive social dynamics.
From the abstract
We examine whether diversity in top leadership—specifically when CEOs differ ethnically from their executive peers—shapes corporate decision-making. We introduce novel measures of CEO ethnic distinctiveness that capture both the representation of a CEO’s ancestry within the executive pool and its cultural distance from prevailing norms. Textual analysis of earnings conference calls shows that ethnically distinct CEOs exhibit lower linguistic assertiveness and a more relational communication styl