Portal de Periódicos da CAPES

Relationship of board diversity with firm’s financial performance: The case of publicly listed companies in China

2021; Publishing house "Virtus Interpress"; Volume: 19; Issue: 1, special issue Linguagem: Inglês

10.22495/cocv19i1siart2

1810-3057

David Qian, Wahed Waheduzzaman, Sarod Khandaker,

Family Business Performance and Succession

This study examines the impact of board diversity including the gender, nationality, and independence of board members on the financial performance of publicly listed companies in China. This study uses a sample of 206 publicly listed companies on the Shanghai Stock Exchange and the Shenzhen Stock Exchange in China to measure the impact of board diversity on their financial performance. Organizational financial performance is measured with the widely-used accounting-based measurement tool return on asset (ROA), and the market value measurement tool Tobin’s Q. After applying a hierarchical regression analysis this study finds that women on the board impact positively on firm’s financial performance while measures by ROA, but not by Tobin’s Q. The study also finds that the nationality of directors and independent board membership is found to have no significant influence on firms’ financial performance. This study has implications on the business firms to develop the strategic guidelines of board composition to ensure the effectiveness and profitability of their companies