Research On The Effects Of Board Diversity Faultlines On Decision Quality And Its Affecting Mechanisms

With the globalization trend in today's society,the flow of goods and talents has become easier.At the same time,the market competition has become increasingly fierce.For enterprises,more efforts must be made to maintain a competitive advantage.The board of directors,as an important institution for making strategic decisions for the company,also faces enormous challenges.The board of directors needs to maintain a diversity of membership,obtain diverse information,and ensure the quality of decisions.However,while diversity members provide rich resources,they will inevitably create conflicts in the decision-making process,which will have a negative effect on the quality of decision-making.How to integrate resources more efficiently and form high-quality decisions? It has always been a difficult issue that has been jointly discussed by the practice community and the theoretical community.Although research on the diversity of board composition has evolved from the heterogeneity of individual attributes to the consistency of multiple attributes,the impact of faultlines on organizational performance has been analyzed from a mediocre perspective of the board.However,the existing research still focuses on the direct relationship between the composition of the board of directors and the performance,but less on the diversification of the board.Under this theoretical and practical background,based on the information decision theory and social category theory,we study the team faultlines formed by the aggregation of individual characteristics,and the impact of the team's operations and goals.This article takes the 2016 A-share listed companies on the Main Board as the research object,based on the calculation of the board faultlines.We use the questionnaire method to study the influence of the board faultlines on the decision quality and its internal mechanism.This paper studies the inverse U-shaped curve relationship between board faultlines and decision quality from the perspective of information diversification and team conflict.So diversity information and conflict play the role of mediating.It also examines the role of the two situational variables,director identification and chairman leadership which regulate the relationship between faultlines and decision quality.This study deepened the understanding of how the team's faultlines affects the effectiveness of the team's operations and enriched the theoretical research on team faultlines and board governance.The empirical study of this paper finds that:(1)The relationship between board faultlines and decision quality has an inverted U-shaped curve.(2)Diversity information plays an intermediary role in the non-linear relationship between board faultlines and decision quality.(3)Board faultlines and teams conflicts are positively related,and team conflicts lead to a reduction in the quality of decision-making.(4)Chairmanship leadership can weaken the inverted U-shaped relationship between board faultlines and decision quality,and it can be achieved through strengthening the intermediary role of diversity information.(5)Directors identity can strengthen the mediating role of diversified information on board faults and decision-making quality,and improve the quality of decision-making.At the same time,the directors agree that it is possible to weaken the positive correlation between board and team conflicts.