Governance Regimes and Nationality Diversity in Corporate Boards: A Comparative Study of Germany, the Netherlands and the United Kingdom

Abstract

ABSTRACTManuscript Type: EmpiricalResearch Question: In this study, the level of nationality diversity of a corporate board is seen as directly dependent on the governance regime of the country of origin of the company. Therefore, to what extent can differences in nationality diversity in corporate boards be explained by structural differences in governance regimes in different countries?Research Findings: A number of hypotheses about the level of nationality diversity in company boards in Germany, the Netherlands, and the UK have been derived. These have been tested and confirmed to a large extent. Governance regime effects are strong, even when controlled for the most relevant company effects.Theoretical Implications: For the first time, the explanation of nationality diversity has been directly connected to the characteristics of a country's governance regime. Additionally, the relative strength of competing country and company forces was discussed and tested.Policy Implications: This study shows how the increase in the diversity of nationalities on corporate boards, as result of global economic forces, are translated through national institutions. On a company level, this implies that the governance regime of a company's country of origin might be either an asset or a liability. It also shows the importance of national‐level institutions when it comes to the ways global economic forces exercise a differentiating effect on the board composition of large multinational enterprises.