Board Diversity and Monitoring: An Investigation of Gender and Task-Related Diversity

Abstract

The boards of directors of state-owned enterprises and state institutions in South Korea is the subject of this research. These boards have not received significant attention in previous studies, despite their distinctive features and control role. The focus is on gender diversity with reference to task-related variables such as insider/outsider, tenure, and occupation. The extent of the board’s monitoring was measured following the rates of revision and rejection of management plans in the board’s minutes. The idea is to assess decision-making as a measure of the effectiveness of the boards. Based on longitudinal data on state-owned enterprises and state institutions in South Korea, gender diversity was positively associated with the extent of the board’s monitoring. Understanding of the positive impact of gender diversity was enhanced with the inclusion of task-related diversity variables in the model. Tenure and occupation diversity were positively associated with the extent of the board’s monitoring. It is proposed that the various diversity factors specific to organizational context be examined to improve understanding of diversity.