Effects of Board Diversity on the Earning Quality of Non-Financial Firms Listed on the Ghana Stock Exchange

Abstract

To maximize wealth, corporate finance must carefully balance cash flows and the cost of capital for a corporation, which results in corporate governance. Corporate governance guarantees openness, responsibility, equity, the organization’s long-term financial health, investor credibility, and the optimization of investor wealth. The study aimed to determine how board diversity affected the profitability of non-financial listed companies on the Ghana Stock Exchange with a specific focus on the effects of gender diversity, age diversity, and nationality diversity on earnings quality. The study used a descriptive design and a quantitative research methodology. The data were examined and reviewed using SPSS version 23, STATA 14, and Excel. The study used secondary data that was collected for a period of 11 years (2011-2021) from the financial accounts of the five (5) non-financial institutions that were listed on the GSE. From the perspective of non-financial listed firms on the Ghana Stock Exchange, the study found that gender diversity and nationality diversity significantly influence earnings quality but age diversity does not have a significant impact on the earnings quality of non-financial listed companies on the Ghana Stock Exchange. The study also recommended that management of publicly traded companies consciously adopt more diverse boards, especially in terms of gender diversity because it is associated with an increase in earnings quality.