This study examines whether the appointment of racial/ethnic minorities into top management positions has a different impact on share price than the appointment of Caucasians into equivalent positions. Our dependent variable is the degree of change in share price following the announcement of racial/ethnic minority and Caucasian men into senior management positions. Market reaction to the naming of racial/ethnic minorities into corporate leadership positions is significant and negative while the market’s reaction to the naming of Caucasians is significant and positive. However, the negative market reaction to the appointment of racial/ethnic minorities into top management positions is mitigated in those firms that have explicitly incorporated diversity into their strategic growth plan. Our findings suggest that to successfully introduce diversity into upper management, firm decision-makers must first signal the importance of diversity to market actors.