Three essays on diversity in multiple levels of strategic leadership

Abstract

In three independent but related essays, we examine diversity (heterogeneity) in strategic leadership to explore the interdependency among multiple levels of strategic leadership and analyze the role that strategic leaders play in helping firms attain the objectives of their strategic decisions. In essay 1, we examine the role of gender spillovers, to the levels of CEO, in the relationship between board gender diversity and firm performance. The empirical evidence on the business case for board gender diversity is equivocal. To offer clarity, we hypothesized that the appointment of female CEOs by gender-diverse boards acts as a mechanism through which women directors affect performance. We performed a meta-analysis of 73 independent samples to test the hypotheses. The results indicate that gender spillovers mediate the relationship between board gender diversity and firm performance. In essay 2, we address the equivocality of the empirical findings on the relationship between board diversity and firm performance. We hypothesize that different forms of board diversity will affect firm performance in distinct ways, and this relationship will be affected by CEO personal range. Evidence from the tests on a sample of large listed Indian firms shows that CEO personal range enhances the benefits of board functional diversity and social capital, whereas it aggravates the potential challenges posed by board gender diversity for firm performance. This work contributes to the emerging literature on diversity that recognizes its multifaceted nature—derived from multiple sources and operating at multiple levels—within strategic leadership. In essay 3, we study the outcomes of emerging economy firm (EMNE) internationalization and the role played by board diversity in attaining those outcomes. We hypothesize that the EMNE internationalization is non-linearly related to innovation performance, and this relationship is contingent on board diversity. We test these hypotheses on a sample of 21-year panel data of 244 Indian biopharmaceutical firms. The findings show that EMNE internationalization has an inverted U-shaped relationship with innovation performance. Furthermore, this relationship is moderated by board functional and gender diversity. This work contributes to the nascent literature that examines the outcomes of EMNE internationalization and the factors that influence them.