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Does Board Ethnic Diversity Impact Board Monitoring Outcomes?
Author(s) -
Guest Paul M.
Publication year - 2019
Publication title -
british journal of management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.407
H-Index - 108
eISSN - 1467-8551
pISSN - 1045-3172
DOI - 10.1111/1467-8551.12299
Subject(s) - ethnic group , diversity (politics) , on board , agency (philosophy) , accounting , compensation (psychology) , cultural diversity , business , demographic economics , political science , economics , psychology , social psychology , sociology , geography , law , social science , archaeology
This study investigates whether board ethnic diversity is associated with stronger board monitoring outcomes. We explore a range of outcomes – CEO compensation, accounting misstatements, CEO turnover–performance sensitivity and acquisition performance – but find no evidence to support this. We also find no evidence that board ethnic diversity improves overall firm performance, even for those firms with higher agency problems. Our results are robust across different methodologies and have important practical implications, by informing the current public policy debate on board ethnic diversity.