ASIA’S BOARD DIVERSITY: DOES DIRECTOR DIVERSITY ON BOARD AFFECT FIRM PERFORMANCE?

1 Board Diversity and Firm Performance Volatility

Diverse directors may have diverse preferences over firms’ policies or even objectives. As shown by Arrow (1951), diverse individual preferences may fail to univocally aggregate in collective preferences and may consequently lead to arbitrary and volatile decisions. Using the board of directors as a laboratory, we test whether diversity leads to higher performance volatility. We show that firms...

Demographic Diversity in the Boardroom: Mediators of the Board Diversity–Firm Performance Relationship

Whereas the majority of research on board diversity explores the direct relationship between racial and gender diversity and firm performance, this paper investigates mediators that explain how board diversity is related to firm performance. Grounded in signalling theory and the behavioural theory of the firm, we suggest that this relationship operates through two mediators: firm reputation and...

CHAPTER 12 Board Diversity

The board of directors is the most important decision-making body in a corporation. Boards are responsible for approving major strategic and financial decisions, such as mergers and acquisitions (M&As) and changes in capital structure, and also for the most important task of all, which is to hire and fire top executives. Not surprisingly, substantial research focuses on the workings of corporat...

How age diversity on the Board of Directors affects Firm Performance

Board Diversity and Corporate Social Responsibility: Evidence from Iranian Firms

According to agency theory, board of directors plays an important monitoring role in reducing information asymmetry and increasing the transparency of financial statements and social responsibility. This research is concerned with examining board diversity and social responsibility of the firms listed on the Tehran Stock Exchange during the years 2011-2015. To do so, a sample of 98 firms was se...