The Power of Professional Expertise: Unravelling the Boardroom Diversity Puzzle Through a Machine Learning Approach

This study examines how board expertise diversity influences firm performance using a novel machine learning approach to classify directors' professional backgrounds. Drawing on data from Spanish listed firms, we develop multidimensional expertise profiles that capture multiple skills held by each director. Results show that expertise diversity enhances firm performance, particularly when measured using continuous indices, and that specific expertise types—such as financial, CEO, consulting and academic—create the greatest value. The effects vary substantially across industries, with innovation‐oriented sectors benefiting the most in contrast to more capital‐intensive sectors. These findings highlight the importance of board composition tailored to the firm context.