An empirical analysis of boardroom diversity on firm performance

Nisar Ahmad, Amjad Naveed*, Amna Fazal

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

Abstract

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.

Original languageEnglish
Pages (from-to)62-76
Number of pages15
JournalReview of Economics and Finance
Volume13
Issue number3
Publication statusPublished - Jan 1 2018

Keywords

  • Directors
  • Firm performance
  • Gender diversity
  • Public listed companies

ASJC Scopus subject areas

  • Economics, Econometrics and Finance (miscellaneous)

Fingerprint Dive into the research topics of 'An empirical analysis of boardroom diversity on firm performance'. Together they form a unique fingerprint.

Cite this