Companies with diverse bosses have way fewer accidents, but they’re actually a bit less productive.
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.
Ethnically Distinct CEOs and Corporate Decision-Making
SSRN · 6431440
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