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An Empirical Analysis of Boardroom Diversity on Firm Performance

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This paper analyses the effect of boardroom diversity on firm performance in terms of Return on Assets and Return on Capital Employed. More specifically, this paper focuses on three dimensions of board diversity: 1) gender diversity, 2) age of the board members, and 3) share of independent directors and executives. By doing this, we try to investigate whether diversity within the board members brings out any positive influence on the financial performance. The results show that gender and age have no significant effect on firm performance, whereas, increasing shares of independent directors and executives have a positive influence on firm performance. On the other hand, CEO duality and audit process reduce the financial performance of firms. From the policy point of view, higher share of independent directors on the board may significantly improve the financial performance of a firm.

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  • Nisar Ahmad & Amjad Naveed & Amna Fazal, 2018. "An Empirical Analysis of Boardroom Diversity on Firm Performance," Review of Economics & Finance, Better Advances Press, Canada, vol. 13, pages 62-76, August.
    • Handle: RePEc:bap:journl:180306
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    1. Zaid Saidat & Claire Seaman & Mauricio Silva & Lara Al-Haddad & Zyad Marashdeh, 2020. "Female Directors, Family Ownership and Firm Performance in Jordan," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 11(1), pages 206-219, January.

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    More about this item

    Keywords

    Directors; Firm performance; Gender diversity; Public listed companies;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination

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