LAUSR

This article uses the US freight railroads, which underwent enforced restructuring due to increased competition following deregulation, to study the impact of board diversity on strategic change, where board diversity is measured from a stakeholder perspective. CEO human capital is also taken into account. By analyzing with panel data methodology a sample including 15 US Class I railroads covering a 20-year period from 1984 to 2004 and representing more than 90% of the railroad market, with a total of 190 observations, we find that strategic decisions are significantly influenced by both board composition and CEO human capital, but that boards exercise more influence in determining firms strategies. We find significant differences in the way directors influence restructuring decisions depending on their stakeholder status. Results indicate the importance of including measures of board composition reflecting diversity of interests in board research.