<p>For decades, researchers, leaders and policymakers have worked to develop and implement interventions to increase the organizational representation of historically under-represented and marginalized groups, such as women in STEM and Black students attending prestigious universities. Despite substantial investments of time and resources, progress has stalled — and, worryingly, these efforts are facing growing backlash. In this Review, we examine diversity initiatives and policies grounded in psychological theory, particularly social cognition and person perception. We begin by outlining common organizational diversity strategies, identifying their psychological foundations and assessing their effectiveness. Although these approaches address an essential dimension of under-representation, they have limited effectiveness when applied alone because they primarily target individuals and intrapersonal processes (for example, stereotypes, prejudice and discrimination) while leaving systems that perpetuate inequality intact. We then consider adjacent literatures of choice architecture and judgement and decision-making, which offer complementary tools for advancing diversity by addressing both the systems in which people operate and the processes that shape individual behaviour. When combined with psychologically informed initiatives, these approaches offer a promising and sustainable path towards meaningful progress in organizational diversity.</p>