Vlerick Repository

In this article, we examine the multidimensional and multilevel nature of diversity in the context of corporate boards. Using the concept of faultlines, we argue that when gender and racial background aligns with human capital attributes of board members, faultlines may be formed with negative implications for firm performance. However, the potential negative impact of faultlines can be alleviated by overlaps in the characteristics of the CEO and minority directors. Specifically, we find that higher overlaps in tenure and personal range of functional experiences help overcome some of the disadvantages that minority directors face and moderate the relationship between board faultline strength and firm performance. Empirical tests using 14 years data on 262 firms belonging to S&P500 index largely support our theoretical ideas. Managerial Summary Boards often suffer from unhealthy team dynamics. In this article, we explore how alignment of board members' attributes may lead to potential subgroup formation within boards. Specifically, we examine how, under existing pressures to increase demographic diversity on corporate boards, alignment of human capital characteristics with gender and racial minority status may lead to the formation of board faultlines that negatively influence firm performance. Our results suggest that the CEO plays a pivotal role in overcoming negative consequences of board faultlines by utilizing shared tenure on board and common functional experiences with minority board members. Our research suggests that board selection needs to focus beyond scrutinizing individual-level human capital and instead understand alignments of directors' profiles that enable optimal board functioning.

This article presents a new methodology for relative valuation that incorporates artificial intelligence. The methodology uses AI to review historical data—such as revenues, earnings, and debt levels—to detect patterns and relationships related to historical valuations that traditional methods might miss. By integrating AI into the relative-valuation process, organizations can transform a traditionally subjective art into a more rigorous, transparent, and data-driven science. The process not only enhances valuation accuracy but also builds confidence among stakeholders by clearly showing the rationale behind each valuation decision. As a case study, the authors apply their methodology to Mastercard, analyze the results, and then recommend four key steps that companies should take if they are looking to integrate AI into valuation

Researchers at Vlerick Business School’s Centre for Financial Leadership and Digital Transformation have worked with CFOs and finance leaders to understand how finance can lead in the AI era. Their latest study, building on a 2023 digital-maturity diagnostic published in MIT Sloan Management Review, combines survey responses from over 100 senior finance executives with company-level data to explore what enables finance teams to become strategic business partners in an AI-driven world. The findings reveal that although AI adoption is widespread, its impact is often limited by organizational misalignment, digital overload, and the challenge of integrating new technologies without overwhelming human decision-making. The real obstacle turns out to be not the technology itself but whether finance teams are structured to absorb and apply it effectively.