Impact of Board Diversity on Firm Performance: Evidence From Sri Lanka

Dedunu, HH; Anuradha, P.

doi:10.18510/ijmier.2020.614

Cited by 10 publications

(5 citation statements)

References 26 publications

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“…Prior studies have consistently provided a positive effect on improving the firm's performance (Charles et al ., 2018; Dedunu and Anuradha, 2020; Fathonah, 2018; IFC, 2019; Khlif and Achek, 2017). Companies employing women in the structure of the board of directors can perform much better than those not employing women (Lückerath-Rovers, 2013).…”

Section: Resultsmentioning

confidence: 99%

“…Gender diversity in the business area has driven the improvement of the firm performance in terms of ROA, ROE and stock value. In prior studies (Alabede, 2016;Dedunu and Anuradha, 2020), a positive impact on the relationship between gender diversity and firm performance has been found. It means that the inclusivity of women occupying structural positions is considered empirically to make firms more profitable, but how is the firm performance suffering financial distress?…”

Section: Introductionmentioning

confidence: 88%

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Gender diversity and firm performances suffering from financial distress: evidence from Indonesia

Abbas

Frihatni

2023

JCMS

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PurposeThis paper aims to demonstrate gender diversity in the structure of corporate governance and test the effect of diversity on the firm performance suffering from financial distress.Design/methodology/approachThe paper is quantitative using a sample of 467 public firms in Indonesia. Data were analyzed into statistics descriptive and the hypothesis was tested using the test of logistic regression.FindingsThe preliminary results of the paper demonstrate the number of firms employing women and men in the structure of corporate governance of 13% on the commissioner board, 7% on the director board and 5% on the audit committee. Based on the test of effect, this paper further found that firms employing women and men (gender diversity) in the structure of the board of commissioners, tend to suffer from financial distress lower than firms only employing men (non-gender diversity).Research limitations/implicationsThis paper is not an effort to make the proportion of voices of women equal to men, however the representation of women at least exists in the structure of corporate governance as part of workforce diversity and inclusivity. In addition, this paper is considered not to use panel data with the purpose of avoiding repetitive data because of the use of a nominal scale in the logistic regression model.Practical implicationsThe finding of the paper is addressed to deliver insights into the current conversation on the issue of women's day with the theme of Each for Equal and to firms in positioning women in the structure of boardrooms.Originality/valueThis paper extends the limited scholarly work on the nexus between gender diversity and financial performance. The framework of social identity theory and the tenet of corporate governance are elaborated to disclose the finding that firm shareholders tend to benefit from gender diversity in the structure of the commissioner board.

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Section: Resultsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 88%

Gender diversity and firm performances suffering from financial distress: evidence from Indonesia

Abbas

Frihatni

2023

JCMS

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“…Women tend to arrive on boards of directors with different backgrounds and experiences than men do, which may result in a different orientation toward the various stakeholders in the organization. In addition, having women on boards of directors has been shown to improve financial performance (Khan and Subhan, 2019;Dedunu and Anuradha, 2020;Abbas and Frihatni, 2023;Loukil et al, 2019;Brahma et al, 2021;Gyapong et al, 2021;Dettori and Floris, 2022). In addition, female board members contribute to better governance through higher attendance and monitoring rates than their male counterparts (Terjesen et al, 2009).…”

Section: Gender Diversitymentioning

confidence: 99%

Does corporate social responsibility mediate the relationship between board diversity and financial distress: evidence from an emerging economy?

Farooq,

Khan,

Jabri

et al. 2023

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Purpose The study hypothesized that the impact of board diversity on financial distress (FD) is not direct but rather mediated by the firm’s corporate social responsibility (CSR) activities. Consequently, the purpose of this study is to examine the impact of CSR as a mediator in the board diversity–FD relationship. Design/methodology/approach The study examined six board diversity dimensions – age, gender, nationality, education and tenure in 81 nonfinancial Pakistan Stock Exchange (PSX)-listed firms from 2010 to 2021. The CSR engagement of the sample firms is evaluated using a multidimensional financial approach and the likelihood of FD is computed using Altman’s Z-score. The system-generalized method of moments estimator is used to meet the study objectives. In addition, several tests are run to determine the robustness of the study’s findings. Findings Based on the procedure for mediation analysis outlined by Baron and Kenny (1986), the authors found that CSR is significantly inversely associated with the likelihood of FD. Second, board diversity variables age, gender and national diversity were positively associated with CSR. Third, board age, gender and national diversity are significantly inversely related to FD. Finally, it was found that there is partial mediation between board age diversity and FD, whereas full mediation is shown between board age diversity and FD and between board nationality diversity and FD. Practical implications This study provides practical insights into PSX’s board diversity for companies, regulators and policymakers. Originality/value This research studies the connection between board diversity and FD. In addition, the current study extended the analysis by testing for the first time the mediating role of CSR in the diversity–distress relationship, particularly in the context of an emerging economy.

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“…Return on assets and return on sales are actively used empirical tools (Isidro and Sobral, 2014;Knežević et al, 2017;Dedunu and Anuradha, 2020) in the context of corpo rate governance effectiveness. Table 1 shows dependent variables: ROA and ROS with their definition and data sources, which are used in a current study similar to the presented literature.…”

Section: Return On Salesmentioning

confidence: 99%

International Experts’ Influence on Company Internationalization

Kravchenko¹

2021

CEMJ

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Purpose: The article evaluates the associative relationship between international supervisory board experts and foreign ownership, along with the experts’ influence on the financial and operating performance of firms. The study was based on data collected for 257 companies listed on the Warsaw Stock Exchange in 2010–2015. Methodology: The dataset was built as a panel, and then generalized least squares regression models with a fixed or random effect were employed to test hypotheses. Findings: The findings of the study clearly show that the presence of investigated firms in foreign markets positively affects company performance. Moreover, models with dependent variables ROA and ROS show that supervisory board members with foreign experience positively affect profitability indicators of firms that do not operate on foreign markets. The data analyses reveal that international experts are more effective advisors for companies that conduct no business activities on foreign markets. Furthermore, the results show a positive moderate association between the share of international experts in supervisory boards and the share of foreign ownership in the company. Originality: The article contributes to the understanding of determinants and consequences of the presence of international experts in supervisory boards and company internationalization.

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Impact of Board Diversity on Firm Performance: Evidence From Sri Lanka

Cited by 10 publications

References 26 publications

Gender diversity and firm performances suffering from financial distress: evidence from Indonesia

Gender diversity and firm performances suffering from financial distress: evidence from Indonesia

Does corporate social responsibility mediate the relationship between board diversity and financial distress: evidence from an emerging economy?

International Experts’ Influence on Company Internationalization

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