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Choices in CDO appointment and firm performance: Moving towards a Stakeholder-based approach

  • Nikhil Mehta
  • , Anju Mehta
  • , Yusuf Hassan
  • , Holly Buttner
  • , Sanchita RoyChowdhury

Research output: Contribution to journalArticlepeer-review

Abstract

The choices associated with a chief diversity officer (CDO) appointment can significantly impact firm performance. However, research examining this link is scarce. To bridge this gap, we draw upon stakeholder, upper echelons, and institutional theories to examine how choices related to CDO appointments, namely, gender, type of hire, and type of position, impact firm performance. Using data from Fortune 1000 and S&P 500 U.S. firms on 101 CDO appointments, we investigate how CDO appointment choices influence firm performance. Our results indicate that appointment of a female CDO is not associated with a significantly better firm performance than hiring a male CDO. However, consistent with our hypotheses, we found evidence that both - the type of CDO position and the type of hire are important to firm performance. Notably, a firm's performance gains are substantially increased when the firm hires a CDO externally to fill a newly created CDO position.
Original languageEnglish
Pages (from-to)233-251
Number of pages19
JournalJournal of Business Research
Volume134
DOIs
Publication statusPublished - Sept 2021

Keywords

  • Diversity management
  • Stakeholder theory
  • Upper echelons theory
  • Chief diversity officer appointment
  • Social inclusion
  • Firm performance

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