Corporate Board Diversity Research Articles

Corporate Governance and Gender Diversity in Nigerian Boardrooms

In recent times, corporations are increasingly under pressure to ensure diversity within their boardrooms and a large number of academic research have reported findings consistent with the view that boards perform better when they include a diverse range of people. Women have unique characteristics needed to positively influence the strategic direction of a corporation and contribute to the growth of firms. In spite of such revelations, evidence suggests that women are under-represented in senior executive and board positions. In many parts of Africa, socio-cultural traditions inhibit women from attaining these roles. Given the emphasis placed on board diversity and inclusion of women as an essential part of good corporate governance, the relationship between gender diversity and board effectiveness deserves both theoretical and empirical investigation. This research is important because it represents the first theoretical review on gender diversity in corporate boards in Nigeria.

Diversity of Dutch pension fund boards

In this article, we investigate the level of diversity of the largest 100 pension funds in the Netherlands. Our results indicate that pension fund boards mainly consist of males close to retirement. We compare pension fund board diversity in the Netherlands with diversity in (inter)national corporations and find similar levels of diversity. This high level of similarity indicates that the large body of research on corporate board diversity can potentially be useful when improving pension fund board diversity in the Netherlands and potentially elsewhere.

Gender parity and state legitimacy: From public office to corporate boards

In most countries around the world, women make up a small minority of corporate boards of directors, which remain predominantly male. In the last decade, many European countries have adopted laws that impose mandatory quotas on corporate boards of directors to achieve gender balance in corporate leadership. In the United States, by contrast, corporate board diversity is largely a matter left to corporations’ voluntary initiatives, not law, and the “business case for diversity” dominates the debate. This article traces the evolution of the corporate board gender balance laws in Norway and France. Although it is often said that the presence of women in corporate leadership is “good for business” in Europe, I argue that the new private-sector gender quotas are best understood as mechanisms to improve the democratic legitimacy of the state. In France, the proposal to impose gender quotas on corporate boards emerged shortly after the law imposing similar quotas on candidates for elected office. However, the French constitution had to be amended before each law was ultimately adopted. The unique constitutional genesis of the corporate gender quotas laws in France illustrates the connection between the “business case for diversity”and foundational concerns about the legitimacy of democratic policy-making. This connection is more apparent in European countries than it could be in the United States, due largely to the corporatist frameworks of governance in the former. The comparison suggests that corporatist traditions may open up opportunities for the pursuit of gender equality which are absent from the American arena.

The Bottom Line: Corporate Performance and Gender Diversity in the C-Suite (2004-2008)

This report makes the bottom-line business case for gender diversity in the C-Suite (2004-2008). The companies are Fortune 500. The performance measures are ROS, ROIC, and ROE. The results are similar to those published by Catalyst Inc for gender diversity in Corporate Boards, using the same companies and years.

Corporate board diversity and firm performance: Evidence from Nigeria

This paper investigates the impact of corporate board diversity on the financial performance of Nigerian quoted firms using a panel data of 122 quoted Nigerian firms. The aspects of board diversity studied comprise board nationality, board gender and board ethnicity. The Fixed Effect Generalised Least Square Regression is used to examine the impact of board diversity on firm performance for the period: 1991-2008. The results show that gender diversity was negatively linked with firm performance, while board nationality and board ethnicity were positive in predicting firm performance. The study provides insights for practitioners and policy makers on the need to view the board as a strategic resource in line with the resource dependency theory instead of viewing the board solely from agency theory perspective.

Does Corporate Board Diversity Affect Corporate Payout Policy?

This paper investigates whether board diversity has a significant impact on corporate payout decisions. Previous studies exclusively focus on examining the relation between a measure of firm performance and board diversity. The major advantage of our study is to investigate the direct impact of board diversity on a major corporate decision - i.e., dividend payout policy. We find that firms with diverse boards are more likely to pay dividends and tend to pay larger dividends than those with non-diverse boards. After controlling for various firm characteristics and exploring alternative explanations for the positive association between board diversity and dividend payout policy, our results suggest that board diversity has a significant impact on dividend payout policy. The impact of board diversity on dividend payout policy is particularly conspicuous for firms with potentially greater agency problems of free cash flow, suggesting that diverse board helps mitigate the free cash flow problem. Our findings are consistent with the argument that board diversity enhances the monitoring function of directors for the benefit of shareholders. We also show that significantly larger portion of firms pay dividends after they added a diverse director to their boards and that firms pay significantly higher dividends after adding a diverse director for the first time. However, the change in dividend payout ratio is not significant when firms add another diverse director to their already diverse boards. Also, the benefits of board diversity are not materialized when directors share the same gender or ethnic tie with the CEO. Our findings have an important implication for policies aiming to increase the number of diverse directors in corporate boardrooms. What makes the significant difference is not the sheer number of diverse directors in the board but the diversity they bring to the board.

National Institutional Systems as Antecedents of Female Board Representation: An Empirical Study

Manuscript Type: Empirical Research Question/Issue: How are national institutional systems related to the proportion of women found on corporate boards of directors of companies listed in particular countries? Which particular types of national institutions play the most important role? We explore cross-country variation in the pattern of female representation on corporate boards and evaluate the extent to which it is associated with the nature of national institutional systems as captured in five frameworks each of which emphasizes the importance of a distinct type of national institutions. Our analysis includes 38 countries and covers the years 2001–07. Research Findings/Insights: Our findings show that as much as half of the variation in the presence of women on corporate boards across countries is attributable to national institutional systems and that culturally and legally-oriented institutional systems appear to play the most significant role in shaping board diversity. Theoretical/Academic Implications: Our study suggests that country-level institutions, previously neglected in studies of board diversity, play an important role in shaping the prevalence of women on corporate boards and that these need to be more fully incorporated in future research on board diversity. Practitioner/Policy Implications: The importance of national institutional systems for board diversity suggests that policy levers of a regulatory nature and national cultural characteristics are important elements in driving corporate board diversity and offer distinct opportunities for tailoring a mix of corporate governance interventions that suit the particular institutional nature of a given country.

Gender Diversity in Corporate Boards: A Synthesis of the Evidence and Practices

This paper aims to provide a synthesis of prior conceptual and empirical work on the presence of women on corporate boards. Despite much progress in many spheres of society, the presence of women on the boards of North American listed firms has remained relatively stagnant over the past 20 years, with many firms still having all-male boards. The weak presence, as well as the lack of substantive progress over time, raises questions about the fairness and lack of bias in the process underlying board appointments. Several factors – structural and individual – prevent or constrain progress in the appointment of women on corporate boards. Such lack of progress is surprising despite the many potential advantages of gender diversity at the board level. Many countries and firms have implemented various means or activities to accelerate and raise women`s presence on boards. The advantages and disadvantages of such means and activities are reviewed and formal recommendations are put forward for firms that are interested in raising their board`s gender diversity. However, as individuals, women also carry a share of the responsibility for their advancement on boards. We conclude with some comments and a synthesis of prior empirical research on board diversity, pointing out the limitations of such research.

Women and corporate boards of directors: The promise of increased, and substantive, participation in the post Sarbanes-Oxley era

Few aspects of corporate board diversity have generated the focused attention that the participation, position, and promise of women's service on the board has generated, especially in recent years. Of particular note is the extent to which women serve on large firm boards of directors (e.g., Fortune 500 firms). Increases in levels of participation have been described as glacial. While critics decry the level of participation of women on large-scale corporate boards, careful scrutiny suggests substantial progress. Concurrent with steady increases in the overall participation of women on corporate boards are increases in their presence on key board committees. Importantly, women's leadership of key board committees and their service as lead directors has improved in parallel with increases in their board memberships. These increases are particularly noteworthy in the post Sarbanes-Oxley (SOX) period. Such trends suggest the continued progress of women in assuming prominent positions in the corporate governance landscape, and provide evidence that the increasingly challenging environment in the post-SOX era has not attenuated the gains noted in the pre-SOX period.

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

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.

Corporate Board Diversity And Performance Of Microfinance Institutions: The Effect Of Gender

This paper examines empirically the relationship between corporate board diversity and the performance of Microfinance Institutions (MFIs). The study uses a panel data set of 52 Microfinance Institutions in Ghana covering the ten year period 1995 - 2004. Analysis is done within the Panel Data GLS-Random Effect framework. Though, generally mixed results are found with regard to the broad corporate governance variables, the study shows that having women CEOs on MFI boards enhance performance and also the more women there are on a board, the better the performance. Thus, findings of the study suggest that board diversity through inclusion of women is important for enhanced performance of MFIs.

Corporate Governance, Board Diversity, and Firm Value

Corporate Governance, Board Diversity, and Firm Value

Corporate Governance, Board Diversity, and Firm Value

This study examines the relationship between board diversity and firm value for Fortune 1000 firms. Board diversity is defined as the percentage of women, African Americans, Asians, and Hispanics on the board of directors. This research is important because it presents the first empirical evidence examining whether board diversity is associated with improved financial value. After controlling for size, industry, and other corporate governance measures, we find significant positive relationships between the fraction of women or minorities on the board and firm value. We also find that the proportion of women and minorities on boards increases with firm size and board size, but decreases as the number of insiders increases.

Corporate Governance, Board Diversity, and Firm Performance

This study examines the relationship between board diversity and firm value for Fortune 1000 firms. Board diversity is defined as the percentage of women, African-Americans, Asians, and Hispanics on the board of directors. This research is important because it presents the first empirical evidence examining whether board diversity is associated with improved financial value. After controlling for size, industry, and other corporate governance measures, we find significant positive relationships between the fraction of women or minorities on the board and firm value. We also find that the proportion of women and minorities on boards increases with firm size and board size but decreases as the number of insiders increases. For women, there is an inverse relationship between the percentage of women on boards and the average age of the board.

The Role of Corporate Law in the Theory of the Firm

The Role of Corporate Law in the Theory of the Firm