Board faultlines and risk-taking

•We find that board faultlines reduce corporate risk-taking capacity.•The impact is primarily driven by faultlines of cognitive characteristics.•Board faultlines influence corporate risk-taking by disrupting internal board order.•Faultlines affect the board's monitoring and decision-making functions.•The activity of the faultlines varies under different contextual factors. We use the 2009–2020 data of Chinese A-share non-financial listed companies to explore the impact of board faultlines on corporate risk-taking. The results show that: (1) Board faultlines reduce corporate risk-taking capacity, and mainly manifested as a decline in idiosyncratic risk-taking. (2) The impact of faultlines is primarily driven by faultlines of cognitive characteristics; the impact of faultlines of demographic characteristics is insignificant. (3) Board faultlines influence corporate risk-taking by disrupting internal board order, lowering its monitoring willingness and ability, and reducing investment efficiency. (4) The heterogeneity test results identify four firm-level factors: industry competition, performance pressure, financial risk, and equity incentives, which can activate faultlines.