Committees’ diversity and firm performance: evidence from an emerging country

Abstract

Purpose This study aims to investigate the relationship between committee diversity and firm performance among non-financial firms listed on the Pakistan Stock Exchange (PSX). Design/methodology/approach This research is based on a comprehensive assessment of secondary data retrieved from annual reports of firms listed on the PSX and publications from the State Bank of Pakistan spanning the period from 2012 to 2021. The study used various statistical models, including pooled regression, fixed effects and random effects, to examine the relationship between diversity among committees and firm performance. Firm-specific variables such as return on assets, return on equity and market price per share were used as proxies for firm performance. Findings The results show that the presence of a female head of the committee on company performance does not show any significant correlation with diversity in board committees. This suggests that the investigation into gender diversity and the appointment of women to leadership positions on these committees is not supported by the findings of this particular sample. Originality/value To the best of the authors’ knowledge, this study is the first to investigate the impact of committee diversity on firm performance in Pakistan, one of the Next Eleven countries.