Can the size of a homogeneous group matter for how it’s perceived and whether it’s diversified? Across experiments and analyses of S&P 1500 corporate boards over time, our research suggests that decision-makers neglect homogeneity in smaller groups while investing extra effort towards diversifying larger homogeneous groups, likely due to increased concerns about lack of diversity, fairness, and potential social sanctions. Our theory can help explain distortions we document in the distribution of the size of homogeneous groups in some of the world’s most powerful organizational groups: S&P 1500 corporate boards. Specifically, for each fewer member on a homogeneous board, boards were 1-2 percentage points less likely to diversify by adding at least one underrepresented member in the year ahead. As corporate board size decreased, we found that all-male and all-White boards became increasingly overrepresented relative to expectations, suggesting greater strategic avoidance of homogeneity in larger groups, but not smaller groups.
Authors: Aneesh Rai (assistant professor, Smith School), Edward H. Chang (assistant professor, Harvard
University), Erika L. Kirgios (assistant professor, University of Chicago), Katherine L. Milkman (professor,
University of Pennsylvania)