Using unique director voting data from Korean firms, we examine how board diversity affects the likelihood of director dissent and whether proposal rejection due to dissension affects firm value and policies. We find that directors on diverse boards are more likely to dissent. The result is robust to exploiting unexpected director resignations as exogenous variation in board diversity. Following proposal rejection, firms, particularly those with diverse boards, experience improvements in firm value and governance (lower earnings management, higher forced CEO turnover-performance sensitivity, and less investment inefficiency) and a decrease in risk, suggesting that board diversity enhances directors’ monitoring effectiveness.

Keywords: Board Diversity, Director Voting, Dissent, Proposal Rejection, Firm Value, Monitoring Effectiveness
JEL Classification: G30, G32, G34​