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International Studies of Management & Organization, 45(1): 25–42, 2015

Copyright © Taylor & Francis Group, LLC


ISSN: 0020-8825 print/1558-0911 online
DOI: 10.1080/00208825.2015.1005995

ALAN WALKER, SILKE MACHOLD, AND


PERVAIZ K. AHMED

Diversity and Conflict in Boards of


Directors
An Exploratory Study of Personality Traits

Abstract: This study seeks to contribute to the debate on board behavior by


investigating how deeper-level diversity, specifically differences in personality,
interacts with demographic diversity to explain board cognitive and affective
conflict. Using survey data from a pilot study of 98 directors in 16 UK boards,
we show that dissimilarities in personality traits are negatively related to
cognitive conflict, but this relationship is moderated by gender and tenure
diversity. Personality differences do not explain affective conflict. The study
provides insights into how theories from psychology may help us understand
antecedents to board behaviors.

Board diversity has become a highly debated subject among academics and
practitioners, not least because boards are very homogenous in terms of
gender, age, and ethnicity (Brammer, Millington, and Pavelin 2007). Yet,
our knowledge about the effects of board diversity is limited because studies
rarely consider diversity beyond a limited number of demographic

Alan Walker is a doctoral student at Dundee University, School of Business,


Nethergate, Dundee, DD1 4HN, United Kingdom; tel: þ44 7590 249941; email:
alan@walkerglobal.com. Silke Machold is a professor at the University of
Wolverhampton Business School, Management Research Centre, MN Building,
Nursery Street, Wolverhampton, WV1 1AD, United Kingdom; tel: þ44 1902
323970; fax: þ44 1902 321724; email: S.Machold@wlv.ac.uk. Pervaiz K. Ahmed
is a professor at the School of Business, Monash University, Jalan Lagoon Sela-
tan, 46150 Bandar Sunway, Selangor DarulEhsan, Malaysia; tel: þ603 551
46281; email: pervaiz.ahmed@monash.edu.

25
26 WALKER (UK), MACHOLD (UK), & AHMED (MALAYSIA)

categories, and there is a dearth of research on how diversity impacts board


behavior (Nielsen and Huse 2010).
This gap is especially worrying because there is a rich tradition of scholarship
with the potential to answer questions about the consequences of board diver-
sity. Research from a behavioral perspective has brought us closer to under-
standing how boards actually behave and perform (Van Ees, Gabrielsson,
and Huse 2009). Building on models of team effectiveness (Forbes and Milliken
1999), scholars have empirically shown that processes and behaviors such as
cognitive conflict and effort norms explain board performance better than
the “usual suspects” (Finkelstein and Mooney 2003; Minichilli et al. 2012).
However, aside from studies on gender in boards (Nielsen and Huse 2010), this
research stream has, to date, been silent on the topic of diversity.
A parallel research agenda, largely drawing on upper echelons theory
(Hambrick and Mason 1984), has investigated how top management team
demographic characteristics, including team diversity, influence organiza-
tional outcomes (Wiersema and Bantel 1992; Kilduff, Angelmar, and Mehra
2000). While these scholars examined team diversity much more exhaus-
tively than board researchers, the tendency to rely on demographic proxies
for diversity measures, combined with a neglect of intervening team beha-
vior, has resulted in inconclusive and/or contradictory results (Priem, Lyon,
and Dess 1999; Pitcher and Smith 2001).
In this article, we seek to develop knowledge on diversity, particularly per-
sonality diversity, and board behaviors. Theoretically, we draw on behavioral
perspectives on boards and the team effectiveness literature to understand how
diversity impacts board behavior. Our focus is specifically on cognitive and
affective conflict, as the former is conceptualized as a behavior that enhances
team performance, whereas the latter diminishes it (Jehn 1995). We also
respond to calls for a finer grained understanding of diversity by simul-
taneously investigating the effects of surface level differences (gender, age,
and tenure) and personality diversity on boards’ cognitive and affective conflict
(Harrison and Klein 2007). Only few team studies have investigated personality
compositions and differences (Neuman, Wagner, and Christiansen 1999) and,
to our knowledge, none of these has been on boards. The article is structured as
follows. We commence with a review of the literature on conflict in teams and
diversity, including personality traits, and derive hypotheses, followed by an
outline of the research methods. We then present and discuss the results before
concluding with areas for further research.

Cognitive and affective conflict in boards

Early studies on boards were dominated by a focus on how board structure


and composition affected firm performance. Such research on the “usual
DIVERSITY AND CONFLICT IN BOARDS OF DIRECTORS 27

suspects” yielded only inconclusive results (Finkelstein and Mooney 2003).


Researchers began to investigate how board processes and behaviors
mediated the link between board structure and board task performance.
Building on the literature of team dynamics, Forbes and Milliken (1999)
proposed a model where effort norms, use of knowledge and skills, and cog-
nitive conflict mediate the link between board characteristics and board task
performance. Subsequent research empirically tested how these processes
and behaviors affected board level outcomes (Zona and Zattoni 2007;
Minichilli et al. 2012). However, to date, we have limited knowledge on
the antecedents of board behaviors, especially conflict in boards. Both from
a theoretical and a practical perspective, understanding the causes of posi-
tive and negative behaviors in boards is important, and it is here that
insights from the team literature can guide us further.
The team literature typically distinguishes between two types of conflict.
Cognitive conflict is described as “task-oriented disagreement” arising from
differences in viewpoints, opinions, and ideas (Jehn 1995). Affective conflict
is described as personality or relationship conflict where team member
clashes are characterized by negative emotions and feelings (Jehn 1995;
Pelled, Eisenhardt, and Xin 1999). Cognitive conflict is associated with posi-
tive team outcomes as it enables critical debate, more investigative team
interaction processes, and heightened creativity associated with the explo-
ration of multiple options (Amason and Sapienza 1997). In contrast, affect-
ive conflict is characterized by negative emotions and interactions, where the
search for blame takes precedence over the search for solutions, which, in
turn, leads to poor decision making and decreased team productivity (Pelled
et al. 1999; Buchholtz, Amason, and Rutherford 2005).
Boards differ from work teams in that they are episodic decision-making
groups, they comprise both full-time and part-time directors, and their out-
put is entirely cognitive (Forbes and Milliken 1999). Because of these pecu-
liar features, Forbes and Milliken (1999) argued that boards are especially
prone to “process losses.” Linked back to conflict, it can be theoretically
argued that cognitive conflict as a performance-enhancing behavior can lead
to process gains, whereas affective conflict would lead to process losses
(Jehn 1995). There is some empirical support for this in board research.
For example, Zona and Zattoni (2007) and Minichilli et al. (2012) showed
that cognitive conflict (alongside other processes) affects board task perfor-
mance. However, the impact of cognitive conflict was uneven between
different tasks and not as strong as other predictor variables. One expla-
nation for these findings may be that cognitive conflict does not exist in iso-
lation from affective conflict and that the process gains of cognitive conflict
are mitigated by the losses arising from affective conflict (Zona and Zattoni
2007). Amason and Sapienza (1997, 496) argued that “the crux of the
dilemma is [that] these types of conflict can be aroused by similar conditions.
28 WALKER (UK), MACHOLD (UK), & AHMED (MALAYSIA)

Thus, as teams stimulate cognitive conflict, they may inadvertently trigger


affective conflict.” Therefore, in order to understand affective and cognitive
conflict in boards, we need to understand their antecedent conditions better
and if these have differential impacts on either cognitive or affective conflict.
Findings from team research suggest that diversity is a strong predictor of
conflict (Amason and Sapienza 1997; Jehn, Northcraft, and Neal 1999),
but we do not know if this prediction applies in a board context. In the
following section, therefore, we review studies on diversity and develop
hypotheses on the links between board diversity and conflict.

Diversity in teams and effects on conflict

Influenced by the Upper Echelons Theory (Hambrick and Mason 1984),


scholars investigated whether heterogeneous or homogenous top manage-
ment teams (TMTs) are associated with superior team and firm performance
outcomes. The results from this research stream, however, are inconclusive.
Some studies showed that heterogeneous TMTs were associated with higher
performance, others concluded that homogeneous teams were superior, and
the remaining studies showed no significant relationship (Milliken and
Martins 1996; Nielsen 2010). There are three reasons to explain the lack
of consistency.
First, similar to the “usual suspects” board research, a parsimonious
approach of using demographic diversity to explain variations in organiza-
tional performance neglected the mediating role of processes and behaviors
(Pettigrew 1992). Research from work teams tells us that diversity works
through team processes and behaviors (Jehn et al. 1999), but there are few
studies on the diversity-behavior link in boards (Nielsen and Huse 2010;
Elstad and Ladegard 2012).
A second reason for the lack of consistent findings is related to the
conceptualization of diversity. Harrison and Klein (2007) suggest that the
concept of diversity is, in itself, diverse and can be described as variety, dis-
parity, and separation. Diversity as variety focuses on team compositional
differences in social or functional categories; disparity occurs when one or
more group members outrank others in terms of social status; and diversity
as separation is defined as laterally (opposing) differences in values, opi-
nions, and beliefs (Harrison and Klein 2007). Nielsen (2010) found that most
TMT research conceptualized diversity as variety, without necessarily being
explicit about its use.
A final reason for the inconclusive nature of findings on diversity relates
to the prolific use of demographic variables as proxies for deeper-level cog-
nitive characteristics (Priem et al. 1999). Hambrick and Mason (1984)
acknowledged the problems with the use of “noisy” demographic indicators,
DIVERSITY AND CONFLICT IN BOARDS OF DIRECTORS 29

but argued that such research would, nevertheless, produce indicative find-
ings on which later studies with more rigorous operationalizations of diver-
sity could be founded. Unfortunately, to date, few studies have attempted to
measure cognitive diversity, and these efforts have produced either weak or
inconsistent results in relation to organizational outcomes (Miller, Burke,
and Glick 1998; Barsade et al. 2000; Kilduff et al. 2000). However, what
these studies did show was that demographic and cognitive diversity were
not related, and that further research is needed on how different dimensions
of diversity interact (Kilduff et al. 2000; Nielsen 2010). In responding to calls
for research on surface versus deeper-level cognitive diversity and its effects
on team processes (Van Knippenberg, De Dreu, and Homan 2004), we
investigate the effects of personality traits alongside gender, age, and tenure
on board cognitive and affective conflict.
In order to understand deeper-level diversity, we turn to the psychology
literature and the concept of personality. Psychologists describe personality
as a person’s characteristic pattern of behavior, thinking, and feeling, which
distinguishes him/her from others and, most important, is predictive of
future team behavior and performance (Cattell 1965; Hurtz and Donovan
2000). Many psychologists describe personality as deriving from internal
mental processes (cognition) that have a biological rationale and can be
measured (Cattell 1965; Matthews, Deary, and Whiteman 2003). Some
critics claim that measurements of personality must be treated with caution
because they can divert attention from the impact of environmental
influences on a particular situation, which may have greater influence on
behaviors than “inbuilt” personality traits (Mischel 1999). Nevertheless,
scholars have used the concept of personality in predicting team behaviors
and performance (cf. Neuman et al. 1999).
While there is increasing consensus that the concept of personality has
utility in predicting behaviors, there is some disagreement on how person-
ality is to be measured, specifically how many traits are involved (Neuman
et al. 1999). Here, we adopt Cattell’s personality trait theory and its associa-
ted 16 personality factors (Cattell 1965). Not only have Cattell’s traits been
extensively used in measuring personality (Pystech 2003; Garcia-Sedeno,
Navarro, and Menacho 2009), they also exhibit good behavioral predictabil-
ity (Matthews et al. 2003), and the instrument has been extensively tested to
validate its psychometric properties (Psytech 2003; Revelle 2009).
Personality trait diversity is the extent to which individual team members
differ in their laterally opposing personality traits, and, as such, is congruent
with the conceptualization of diversity as separation (Harrison and Klein
2007). Put differently, teams are diverse at a deeper cognitive level when
individuals within that team vary in their personality trait dispositions. A
well-established phenomenon in the psychology literature is the similarity-
attraction effect (Byrne 1971; Senn 1971). Individuals that are similar in
30 WALKER (UK), MACHOLD (UK), & AHMED (MALAYSIA)

their values, attitudes, and beliefs tend to be attracted to interactions with


each other because they think and feel in similar ways, which creates positive
feedback loops during interactions (Barsade et al. 2000).
Sociologists refer to the concept of “homophily” whereby interactions
between people that are similar tend to be more frequent and with more
positive outcomes than with those between people that are dissimilar (Ruef,
Aldrich, and Carter 2003). Literature on small teams supports the
proposition that individuals prefer working with those that are similar to
themselves on a number of dimensions and attributes (Milliken and Martins
1996; Neuman et al. 1999). Following the logic of the similarity-attraction
thesis, if board members are similar in their personality traits, their interac-
tions in the boardroom are likely to be more engaged and positively charged.
In relation to cognitive conflict, we could, therefore, expect that boards
whose members have similar personalities exhibit higher levels of cognitive
conflict as directors feel comfortable with each other by virtue of being simi-
lar, and, hence, are more open in voicing disagreements and differences in
viewpoints. At the same time, differences in personalities are more likely
to cause misunderstandings of each other’s motivations to question, and,
thus, interactions are more likely to deteriorate into affective conflict
(Buchholtz et al. 2005). We, therefore, hypothesize:
Hypothesis 1: Personality trait diversity is negatively related to cognitive
conflict.

Hypothesis 2: Personality trait diversity is positively related to affective


conflict.
However, as previously discussed, boards differ from other teams in that
they do not continuously work together. Hence, the psychological similarity-
attraction between board members, which takes time to recognize and
manifest itself, may be affected by more immediately obvious demographic
differences. In other words, as boards do not have the same benefit of close-
ness and longevity as work teams (Pelled et al. 1999), personality diversity is
likely to be moderated by more immediately salient demographics. Van
Knippenberg et al. (2004) argued that people are socialized into recognizing
demographic characteristics, such as gender and age, prompting more
immediate reactions to such “obvious” diversity dimensions, compared to
more “hidden” ones, such as experiences or personalities. Barsade et al.
(2000) also proposed that demographic diversity may moderate their
observed effects of affective trait diversity and urge for more research.
Three of the most directly observable characteristics of board members are
their gender, age, and tenure. Studies on top-management team diversity
found these to be negatively related to team performance as they create an
us versus them schism in teams (Milliken and Martins 1996). The theoretical
DIVERSITY AND CONFLICT IN BOARDS OF DIRECTORS 31

explanation may lie in how salient these categories are perceived to be.
According to Van Knippenberg et al. (2004), salience can be based on norma-
tive expectation (the belief that a difference is meaningful) and cognitive
accessibility (the readiness with which people use the categorization). We sug-
gest that gender, age, and tenure are three such salient diversity categories in
the board context that moderate deeper-level personality diversity in boards.
Gender differences can be described as normatively and cognitively sali-
ent. For example, studies have argued that a critical mass of women results
in more challenges to the status quo in the boardroom (Torchia, Calabro,
and Huse 2011; Elstad and Ladegard 2012); therefore, we expect female
directors to introduce different behaviors. Age is normatively salient in
boards as people are socialized into equating it with greater experience
(Van Knippenberg et al. 2004), which may affect whether and how alternative
viewpoints are received in the board. Finally, tenure diversity may be norma-
tively salient as boards develop distinct working styles, and tenure differences
may affect the integration of the team (Milliken and Martins 1996; Machold
et al. 2011). Based on these arguments from social category salience, we con-
tend that gender, age, and tenure diversity, as highly salient social categories,
positively moderate the effect of deeper-level personality diversity on both
cognitive and affective conflict. We, therefore, hypothesize that:
Hypothesis 3: The negative relationship between personality diversity and
cognitive conflict is positively moderated by gender, age, and tenure diversity.

Hypothesis 4: The relationship between personality diversity and affective


conflict is strengthened by age and tenure diversity.

Methods

Sample and data collection

The hypotheses are tested through a quantitative study based on survey data
in the United Kingdom. The UK governance system is characterized by
dispersed ownership structures, strong reliance on equity financing, single-
tiered boards, and a clear division of responsibilities between boards, share-
holders, and management (Denis and McConnell 2003). UK boards are also
typically portrayed as highly homogenous in terms of gender, age, and eth-
nic composition (Brammer et al. 2007) and are, therefore, a particularly
fruitful empirical setting for our research.
The choice of a survey method was motivated by the need to avoid using
archival data as proxy measures for board processes. Further, our interest in
deeper-level diversity necessitated the capture of actual personality traits
32 WALKER (UK), MACHOLD (UK), & AHMED (MALAYSIA)

rather than relying on proxies (Priem et al. 1999). We, therefore, designed a
survey instrument based on established measures in the psychology and
board process literature.
Data were collected through an online questionnaire in 2010. Given our
conceptualization of personality trait diversity, data from all board mem-
bers were collected (i.e., measures of each director’s personality traits)
rather than a single representative respondent from each board, as is com-
mon in board process research (Minichilli et al. 2012). Because of the chal-
lenges associated with gaining access to board members and having all
board members participate in the survey (Pettigrew 1992), we used a con-
venience sampling approach. Board chairpersons and CEOs known to
one of the authors were approached through a mail-out letter inviting the
board to participate in the research in return for individualized feedback
on personality traits of each director and group feedback based on an over-
all board evaluation. We highlighted in the letter that boards can use the
(free) analysis and feedback as part of their annual board evaluation, a
practice recommended by the UK Corporate Governance Code. Although
such convenience sampling may be seen as introducing biases to the
research, analyses from psychological research comparing convenience
and random sampling show that there are fewer variances between random
and convenience sampled data than might be expected, and only minimal
differences in diversity (Hultsch et al. 2002), which is the particular focus
of this research. Participating companies and boards were also similar to
UK companies in terms of sector distribution, board size, and the percent-
age of women directors.
For this study, we used data collected in the pilot phase of the research,
while continuing with data collection for the full study. The questionnaire
comprises two parts. The first part measures 16 personality traits using
the 15FQþ, available from Psytech, a commercial company that publishes
the manual online (Psytech 2003). To this first survey, a second one was
added, which included measures of board processes (see section below).
The final dataset used for this article comprises 98 respondents from 16
boards.
Common methods bias is less likely to be a problem in this research since
we did not collect data from a single board respondent but from each board
member. However, we performed a number of procedural remedies in the
instrument development and data collection phase as recommended by
Podsakoff et al. (2003). Further, the personality trait questionnaire has
built-in questions to test for social desirability bias (on a scale from 1 to
10), which are independent from the 16 personality trait factors. In our data,
the mean social desirability bias is 7 (standard deviation 1.95), which is gen-
erally considered to be acceptable and representing no cause for concern
(Psytech 2003).
DIVERSITY AND CONFLICT IN BOARDS OF DIRECTORS 33

Variables and measures

Dependent variables

Cognitive conflict was measured using three items on a five-point Likert scale
that represent the degree to which respondents perceive the board to have dis-
agreements about the tasks at hand (see Appendix). The variable cognitive
conflict was computed as the mean of these items from each respondent. The
variable group cognitive conflict was computed as the mean of each board mem-
ber’s cognitive conflict score. The Cronbach alpha for this variable was 0.72.
Affective conflict was measured using five items on a five-point Likert
scale that represent the degree to which respondents perceive the board
to have disagreements based on emotional and relationship clashes (see
Appendix). The variable affective conflict was computed as the mean of
these items, the variable group affective conflict as the mean of all individual
board members’ affective conflict score. The Cronbach alpha for this
variable was 0.85.
We also performed confirmatory factor analyses on all items that showed a
good model fit (GFI ¼ 0.95; AGFI ¼ 0.91; CFI ¼ 0.99; RMSEA ¼ 0.03). For
discriminant validity between the constructs, we checked regression weights
and correlations. The VE AC and VE CC are both greater than the corre-
lation squared term (0.42); hence, discriminant validity is established.

Independent variables

Personality traits were measured using the 16 factors based on Cattell


(1965). The only difference is that we substitute the original factor B
“Intelligence” with factor b “Intellectance,” which measures the subject’s
confidence of their own intellectual ability (irrespective of their actual IQ).
This is a better fit than the original factor B because there are doubts about
whether intelligence is a personality trait and if IQ could, indeed, be mea-
sured in an untimed and unsupervised test (Flynn 2007). The 16 personality
traits include
1. Empathy;
2. Intellectance;
3. Emotional stability;
4. Dominance;
5. Seriousness;
6. Conscientiousness;
7. Retiring;
34 WALKER (UK), MACHOLD (UK), & AHMED (MALAYSIA)

8. Hard-headedness;
9. Trusting;
10. Concreteness;
11. Directness;
12. Confidence;
13. Conventionalism;
14. Group-orientation;
15. Informality; and
16. Composedness.

The questionnaire outputs these traits as raw scores and as normed scores
(against a population of 1,186 male and female adults, Psytech 2003), which range
from 1 to 10. For the purposes of this analysis, normed score data were used.
We define personality trait diversity as the extent to which each board
member is dissimilar from the others in the team in respect of personality
traits. This is in line with conceptualization of diversity as separation, and
similar to the study by Barsade et al. (2000), who also measured dissimilarity
(distance) but in affective traits only. Following Barsade et al. (2000), we
computed the variable personality traits dissimilarity as the mean Euclidian
distance that each board member has to all others in respect of the 16 per-
sonality traits. For example, in a board with four members, the dissimilarity
score for each board member was computed by first calculating the
Euclidian distance in the 16 traits to the other three members and then
taking the mean of the three Euclidian distance scores. In this way, we ended
up with a unique dissimilarity, or distance, score for each board member.
For the remaining diversity variables, we obtained data on gender, age, and
tenure for each board member. We computed gender diversity as the Blau
index (Kilduff et al. 2000). As we have two categories (male and female),
the value of the Blau index can range from 0 (entirely homogeneous) to 0.5
(both categories are equally present). For age and board tenure, we computed
for each board member the mean Euclidian distance from the others. High
values indicate high levels of dissimilarity from the rest of the team.
To compute the interaction effects, we first mean-centered the originating
variables and then computed the new variable as the product of the originat-
ing mean-centered variables.

Control variables

As the size of the team can affect levels of conflict (Amason and Sapienza
1997), we needed to control for board size. This was measured as the total
DIVERSITY AND CONFLICT IN BOARDS OF DIRECTORS 35

number of board members with a logarithmic transformation to adjust for


skewness. We also controlled for one of the “usual suspects” (Finkelstein
and Mooney 2003)—insider/outsider ratio—because non-executive directors
are supposed to challenge and question executives, a behavior that can
affect levels of conflict. We computed this variable as the percentage of
non-executives on the board.
Any study of boards should also pay attention to contextual variables
(Zahra and Pearce 1989). Hence, we control for company size (based on a
turnover index from 1 to 5), and company growth (based on percentage
turnover growth experienced in the previous year).

Results

Table 1 shows descriptive statistics and bivariate correlation coefficients for


the variables used in the regression analyses. Based on this preliminary analy-
sis, we also conducted checks for multicollinearity after each regression. VIF
values ranged from 1.1 to 2.3, which indicate that multicollinearity is not a
problem in our study (Hair et al. 2010).
We also find a high correlation among the dependent variables, affective
and cognitive conflict (0.71; p < .01). This supports extant literature on
teams where the two were also found to be strongly correlated (Amason
and Sapienza 1997; Mooney, Holahan, and Amason 1997). We utilized mul-
tiple linear regression analyses to test our hypotheses. The regressions were
conducted stepwise in order to capture each set of variables to the model sig-
nificance, in order to identify which set had the greatest explanatory power.
The first model includes the control variables. The second model includes
the demographic diversity variables: age, gender, and tenure diversity. The
third model includes all of the above and personality trait diversity. Finally,
the fourth model includes the interaction effects between personality
diversity and demographic diversity. The regression analyses are shown in
Table 2 with Models 1a–4a for cognitive conflict and Models 1b–4b for
affective conflict.
Model 3a shows that personality trait diversity is negatively and signifi-
cantly related to cognitive conflict (b ¼ –.25, p < 0.01), which supports H1.
However, the strongest model fit is Model 4 (adjusted R2 ¼ 0.44), which
captures the interaction effects. What the results show is that personality
diversity alone is not a significant predictor; rather it works in conjunction
with gender and tenure diversity (although not with age diversity), thus
partially supporting Hypothesis 3. Put differently, in demographically
homogenous boards, similar personalities are needed to stimulate cognitive
conflict, whereas demographically diverse boards thrive on differences in
personalities to enjoy higher levels of cognitive conflict.
36

Table 1
Descriptive statistics and correlation analysis

Mean SD 1 2 3 4 5 6 7 8 9 10

1. Turnover band (firm size) 2.96 1.32 1


2. Firm growth 3.99 1.84 0.09 1
3. Board size (ln) 1.90 0.41 0.43** 0.04 1
4. % non-executives 39.82 31.44 0.33** 0.47 0.04 1
5. Age dissimilarity 9.53 4.64 0.14 0.10 0.23* 0.09 1
6. Gender diversity 0.17 0.18 0.05 0.01 0.33** 0.23* 0.20 1
7. Tenure dissimilarity 3.73 2.77 0.26* 0.23* 0.12 0.20 0.36** 0.27** 1
8. Personality trait dissimilarity 11.13 1.84 0.07 0.22* 0.04 0.06 0.22* 0.16 0.04 1
9. Board cognitive conflict 3.29 0.48 0.04 0.05 0.19 0.21* 0.15 0.28** 0.16 0.24** 1
10. Board affective conflict 2.08 0.58 0.20 0.09 0.13 0.21* 0.02 0.38** 0.48** 0.10 .071** 1
Valid N (listwise) 98

Notes: Pearson’s product moment correlation coefficients 2 tailed: *p < 0.05, **p < 0.01, N ¼ 98.
Table 2
Regression analyses for cognitive and affective conflict

Board cognitive conflict Board affective conflict

(standardized beta coefficients) Model 1a Model 2a Model 3a Model 4a Model 1b Model 2b Model 3b Model 4b

Board and firm characteristics


Board size (ln) 0.34** 0.25* 0.22* 0.29** 0.33** 0.26*** 0.25** 0.30***
% non-executive directors 0.47*** 0.63*** 0.59*** 0.58*** 0.44*** 0.73*** 0.72*** 0.68***
Company size (turnover band) 0.37** 0.35** 0.31** 0.34*** 0.50*** 0.47*** 0.46*** 0.45***
Company growth 0.31** 0.44*** 0.35** 0.37*** 0.17 0.42*** 0.40*** 0.39***
Demographic diversity
Age dissimilarity 0.09 0.15 0.17þ 0.00 0.01 0.02
Gender diversity 0.26* 0.30** 0.29** 0.33*** 0.34*** 0.35***
Tenure dissimilarity 0.29** 0.27** 0.31** 0.53*** 0.53*** 0.54***
Personality trait diversity
Personality trait dissimilarity 0.25** 0.13 0.07 0.04
Diversity interaction effects
Age*personality diversity 0.17 0.28**
Gender*personality diversity 0.22** 0.03
Tenure*personality diversity 0.35** 0.43***
R 0.44 0.59 0.63 0.71 0.46 0.79 0.79 0.84
R squared 0.19 0.35 0.40 0.51 0.21 0.62 0.62 0.70
Adjusted R squared 0.16 0.30 0.35 0.44 0.18 0.59 0.59 0.67
F(sign) full model 5.51*** 6.88*** 7.48*** 8.02*** 6.34*** 20.62*** 18.18*** 18.55***
F change 5.51*** 7.22*** 7.98** 6.06*** 6.34*** 31.38*** 1.03 8.04***
37

Notes: Levels of significance are: þ p < 0.10 level, *p < 0.05 level, **p < 0.01 level, ***p < 0.001 level.
38 WALKER (UK), MACHOLD (UK), & AHMED (MALAYSIA)

When examining the results for affective conflict, we find that personality
trait diversity has no significant relationship (on its own) with affective con-
flict, and, hence, H2 is not supported (Model 3b). However, as in the case of
cognitive conflict, we find the best model fit for the interaction effects
(adjusted R2 ¼ 0.67). Gender diversity in conjunction with dissimilar person-
alities has no effect on affective conflict. However, tenure positively moder-
ates personality diversity effects on affective conflict (b ¼ 0.43, p < 0.001)
whereas age diversity in conjunction with personality diversity lowers affect-
ive conflict (b ¼ 0.28, p < 0.003). Thus, we only find partial support for
Hypothesis 4 in respect to tenure.
Finally and surprisingly, the outsider ratio has a strong negative
relationship with both cognitive and affective conflict. This suggests that
non-executives do not contribute to the explanation of the cognitive con-
flict, that is, to offering alternative and opposing viewpoints and opinions
(Finkelstein and Mooney 2003; Zona and Zattoni 2007).

Discussion

We set out to investigate how diversity can affect board behaviors that are
associated with process gains (cognitive conflict) and process losses (affect-
ive conflict). Based on the similarity-attraction thesis, we found support for
the hypothesis that board members with similar personalities would enjoy
positive interactions, resulting in heightened cognitive conflict, which echoes
results from TMT research (Barsade et al. 2000). However, we found no
support for the hypothesis that differences in personalities, on their own,
influence affective conflict. The most interesting result is that diversity in
salient demographic categories moderates the relationship between person-
ality diversity and cognitive and affective conflict.
There are a number of implications for research and practice. First, we
have shown the utility of deeper-level diversity in understanding antecedents
to board behaviors that encompass both process gains and losses (Forbes
and Milliken 1999). Research like ours has the potential to contribute to
behavioral perspectives on boards by investigating how actual, rather than
stylized, personalities shape boardroom interactions (Van Ees et al. 2009).
Second, in responding to calls for investigating diversity more comprehen-
sively (Milliken and Martins 1996), we showed that psychological diversity
interacts with salient demographic diversity categories. This finding suggests
that, theoretically and empirically, we need to move away from considering
diversity categories in isolation from each other. For example, some of the
inconclusive results on how women affect boardroom behaviors and
processes may well be explained by whether or not these women possess
similar personality traits, share similar ages, and if they are newcomers to
DIVERSITY AND CONFLICT IN BOARDS OF DIRECTORS 39

an established board (Nielsen and Huse 2010). A promising new avenue for
enquiry could be the study of fault lines in boards, specifically how directors’
social, demographic, functional, and psychological characteristics align to
create single or multiple schisms (Kaczmarek, Kimino, and Pye 2012).
Our research also has implications for practice. Board nomination com-
mittees may wish to move away from prioritizing functional skills and experi-
ence to consider also the personality profiles of candidates and their fit with
the existing board team. Further, our research supports the case for appoint-
ing more women directors because, in conjunction with different personal-
ities, gender diversity increases cognitive conflict while having no effect on
affective conflict. Thus, by having both different personalities and gender,
process losses are minimized and there is strong potential for process gains
(Amason and Sapienza 1997). Finally, boards should rethink the role that
non-executive directors play and the degree to which they challenge and
propose alternative viewpoints (Finkelstein and Mooney 2003).

Conclusion

We add to the extant literature by showing that personality trait diversity in


conjunction with diversity in salient demographic categories can explain
differential impacts on cognitive conflict and affective conflict. For theory,
the implication is that board studies would greatly benefit from exploring
diversity in a more conceptually and disciplinarily diverse fashion. However,
the research also raises further questions. First, the data did not show a direct
relationship between personality trait diversity and affective conflict. This
may be due to limitations in our measures or in our sample size. Specifically,
further research could seek to disentangle affective and cognitive traits within
personality profiles in order to measure their differential effects. Second, given
that affective and cognitive conflicts were found to be strongly correlated,
more research is needed on the triggers for each type in order to minimize pro-
cess losses consequent to affective conflict. Finally, we did not investigate
diversity as disparity, and it may be that power has a confounding influence
on the effects of personality diversity (Pitcher and Smith 2001). Thus, while
this research overcame some of the problems inherent in the extant demo-
graphic diversity-as-variety literature, we have yet to reconcile the simul-
taneous influences of different forms of diversity (Harrison and Klein 2007).

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Appendix: Conflict Measures

Cognitive conflict items

1. There is often disagreement among members of this board on their


opinions about an issue (Jehn 1995).
2. There is often disagreement over different ideas at the board meeting
(Jehn 1995).
3. It is common for the directors of this board to have differences of
opinion (Jehn 1995).

Affective conflict items

1. Emotional conflict is often evident on this board (Jehn 1995).


2. Anger occurs among some members of the board at most meetings
(Jehn 1995).
3. There is rarely any personal friction between directors at the board
meeting (reverse coding) (Jehn 1995).
4. Personality clashes between directors are not evident at board meetings
(reverse coding) (Mooney et al. 2007).
5. There is usually tension at the board meeting (Mooney et al. 2007).
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