Does Family Ownership Moderate the Relationship between Board Diversity and the Financial Performance of Saudi-Listed Firms

Ayman Hassan Bazhair and Hamid Ghazi H Sulimany ()
Additional contact information
Ayman Hassan Bazhair: Faculty of Business Administration, Department of Economics and Finance, Taif University, Taif 21974, Saudi Arabia
Hamid Ghazi H Sulimany: Faculty of Business Administration, Accounting Department, Taif University, Taif 21974, Saudi Arabia

IJFS, 2023, vol. 11, issue 4, 1-20

Abstract: This paper explores the moderating role of family ownership in the relationship between board diversity and financial performance. The study sampled data of 98 Saudi non-financial companies from 2012 to 2021. The data were analysed using fixed effect regression, while a generalised method of moments (GMM) was employed for a robustness test. The empirical evidence suggests that board gender may not have much relevance in enhancing the financial performance of Saudi firms. In contrast, the research findings emphasised that coupled with stringent monitoring from family ownership, foreign directorship, CEO tenure, and board financial expertise may serve as crucial control mechanisms that can minimise agency costs, leading to higher financial performance. This research modelled how the interaction between family ownership and board diversity attributes may determine financial performance. Hence, the study contributes to the body of knowledge by unveiling a more robust control governance mechanism, particularly in developing economies with ineffective markets for corporate controls.

Keywords: board diversity; financial performance; family ownership; Saudi non-financial listed firms (search for similar items in EconPapers)
JEL-codes: F2 F3 F41 F42 G1 G2 G3 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/2227-7072/11/4/118/pdf (application/pdf)
https://www.mdpi.com/2227-7072/11/4/118/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jijfss:v:11:y:2023:i:4:p:118-:d:1253470

Access Statistics for this article

IJFS is currently edited by Ms. Hannah Lu

More articles in IJFS from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().