Board of Director Diversity and Its Corporate Governance Implications in Maltese Equity-Listed Companies

Purpose: The objectives of this study are (i) to assess the significance as well as implications of the major readily detectable (age, nationality, gender and tenure) and underlying aspects (legal, human resources, accounting and finance and industry-specific competencies) of diversity on the corporate governance (CG) of Maltese Equity-Listed Companies, and (ii) to ultimately recommend how such aspects may make a more positive contribution. Design/Methodology/Approach: Semi-structured interviews were conducted with twenty-three participants, eight directors, ten company secretaries, one chief executive officer, one corporate lawyer, one Institute of Directors representative and two corporate advisors. Findings: The indications are that, in Malta, tenure diversity is the most influential readily detectable aspect, whilst industry-specific competency is the most influential underlying aspect of diversity for CG. The eight aspects of diversity are generally considered most influential advantageously on Board decision-making and problem-solving and least influential advantageously on director complacency, acceptance and communication. It is also generally agreed that a diversity index would be beneficial. Practical Implications: Overall, diversity is beneficial to the mechanisms of the board, yet there is no one standard diversity mix. Each aspect of diversity varies its impact on CG. Originality/Value: Studies in the field of CG emanating from small island states such as Malta are limited. This study provides value to listed companies and the competent authorities by bringing to light the significance and influence on CG of the various diversity aspects under study.