This article takes a novel approach to exploring the business case for diversity (BCD) as it has been adopted in the British National Health Service (NHS), principally in terms of ‘race’ and ethnicity for the sake of clarity and manageability. It draws on realist perspectives that consider issues of context, mechanism and outcome. It concludes that transferring policies from other countries and sectors is problematic, and consequently that the application of the BCD to the NHS must be treated with extreme caution.