The Psychology of Group Processes

Zander, Alvin

doi:10.1146/annurev.ps.30.020179.002221

“…ISSN 1946-052X 2012 Figure 1. Ethnic minority representation in Sri Lankan listed companies' boards Based on social psychology, Zander (1979) finds that group loyalty depends on similarities of group members. Further, Adams & Ferreira (2002) explain this kind of trust is specially required in high environmental uncertainty.…”

Section: Ethnic Minority In Sri Lankan Boardsmentioning

confidence: 99%

The Global Financial Crisis Impact on Ethnic Diversity of Sri Lanka Boards

Wellalage

¹

,

Locke

²

,

Scrimgeour

³

2012

AJFA

5

3

0

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This study investigates the link between ethnic minority directors and agency conflict in Sri Lankan listed companies during a global financial crisis. Due to social and economic pressures in recent decades, ethnic minorities now make up a larger proportion of directors on corporate boards in Sri Lanka. In addition, the global financial crisis has increased demand for boards to strengthen their ethnic diversity in workplaces. This study shows that while Sri Lankan boards increased the number of ethnic minority directors during the global financial crisis, heterogeneous boards increased company agency costs. This evidence provides insights for governments and policy makers as they consider board ethnic diversification in an emerging and highly uncertain environment.

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“…In view of this, a closer look at the model and its components would be of great help to expand our knowledge on diversity not only in Top management teams (TMTs) but also in boards of directors (BODs) that can be viewed in the same context as TMT (Hofman, Lheureux and Lamond, 1997) and it should be noted that it is not organizational performance rather financial performance that is being investigated here and demographic diversity is represented by gender and ethnic diversity (Roberson and Park, 2007;Conyon and mallin, 1997;Daily et al, 1999;Zander, 1979;Costa and Kahn, 2003;Kang and Cnaan, 1995;Rutledge, 1994;Widmer, 1987;Martin and Midgley, 1999;Carson, Mosley and Boyar, 2004). Therefore, these arguments allow us to develop a set of directional hypotheses that explain the impact of the demographic diversity in TMTs and BODs on firm financial performance, thus the following hypotheses are proposed:…”

Section: Hypotheses Developmentmentioning

confidence: 99%

Demographic Diversity in Top Level Management and Its Implications on Firm Financial Performance: An Empirical Discussion

Marimuthu

¹

,

Kolandaisamy

²

2009

IJBM

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This paper explores how demographic diversity in top level management affects firm financial performance. Top level management refers to both top management team and board of directors. Thus, the purpose of this paper is to empirically examine the effect of demographic diversity on top management team and boards of directors with regard to firm financial performance. This paper uses both financial and non-financial data from top 100 non-financial listed companies over the period 2000 to 2006, using the non-probability sampling approach. Demographic diversity comprises of ethnic and gender diversity and performance is measured by Return on Equity (ROE). A Pooled Least Square (PLS) regression method is used and hierarchical regression analyses are presented accordingly. The results indicate that demographic diversity has some significant impact on boards of directors with regard to firm financial performance. However, demographic diversity in TMTs does not create any significant impact on firm financial performance.

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“…In view of this, a closer look at the model and its components would be of great help to expand our knowledge on diversity not only in Top management teams (TMTs) but also in boards of directors (BODs) that can be viewed in the same context as TMT (Hofman, Lheureux and Lamond, 1997) and it should be noted that it is not organizational performance rather financial performance that is being investigated here and demographic diversity is represented by gender and ethnic diversity (Roberson and Park, 2007;Conyon and mallin, 1997;Daily et al, 1999;Zander, 1979;Costa and Kahn, 2003;Kang and Cnaan, 1995;Rutledge, 1994;Widmer, 1987;Martin and Midgley, 1999;Carson, Mosley and Boyar, 2004). Therefore, these arguments allow us to develop a set of directional hypotheses that explain the impact of the demographic diversity in TMTs and BODs on firm financial performance, thus the following hypotheses are proposed:…”

Section: Hypotheses Developmentmentioning

confidence: 99%