When ‘good’ business becomes ‘risky’ business: A look at board gender diversity in a changing environment

Abstract

Since 2017, institutional investors such as BlackRock, State Street Global Advisors, and Vanguard have actively pushed publicly traded firms to increase gender diversity on their boards. However, heightened political and legal backlash in the US against diversity, equity, and inclusion (DEI)—especially following the 2023 US Supreme Court ruling in Students for Fair Admissions v. Harvard—created conflicting pressures for leaders of public companies. We examined trends in Russell 3000 Index firms’ board diversity from 2017–2025, which revealed a plateau after 2023, as firms recalibrated amid conflicting pressures. In this article, we categorize boards by gender diversity thresholds (i.e., three+, two, one-or-none) and show how firms with three+ women directors sustain performance advantages despite backlash. Applying Oliver’s 1991 framework, we identify five strategic responses—from acquiescence to defiance—and provide best practices for preserving the performance benefits of diversity in a contested landscape.