The Effect of the Board’s Educational and Gender Diversity on the Firms’ Performance: Evidence from Non-Financial Firms in Developing Country

Ali Shariff Kabara, Saleh F. A. Khatib (), Ayman Hassan Bazhair () and Hamid Ghazi H Sulimany
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Ali Shariff Kabara: Department of Accounting, Faculty of Social and Management Sciences, Federal University Birnin-Kebbi, Kalgo 862104, Kebbi, Nigeria
Saleh F. A. Khatib: Brunel Business School, College of Business Arts and Social Sciences, Brunel University London, Kingston Lane, Uxbridge UB8 3PH, UK
Ayman Hassan Bazhair: Department of Economic and Finance, Faculty of Business Administration College, Taif University, Taif 21974, Saudi Arabia
Hamid Ghazi H Sulimany: Accounting Department, Faculty of Business Administration College, Taif University, Taif 21974, Saudi Arabia

Sustainability, 2022, vol. 14, issue 17, 1-15

Abstract: Prior studies have analyzed board diversity (mostly in developed nations) using financial firms to measure demographic or cognitive characteristics in relation to firm performance. However, the current study attempted to fill the literature gap by evaluating both demographic and cognitive mechanisms in developing economies using non-financial firms in Nigeria. This study examined how board diversity in terms of the gender and educational level of directors affects the performance of Nigerian stock exchange companies. The study utilized a sample of 67 listed companies from the Nigerian stock exchange over eight years, from 2012 to 2019. A quantitative method using a deductive approach was adopted in conducting fixed effect and generalized method of moments (GMM) estimations for robust findings. The findings support the existence of a significant positive influence of both education and gender diversity on the companies’ performance. These results are consistent with agency and resource dependence theoretical expectations. The outcomes add to the current debates on those types of regulatory setters calling for corporate board diversification. The findings would greatly benefit management in the directors’ selection process as they revealed the importance of both education and gender diversity for better performance and enhancing market value. Thus, they contribute to the literature on the state of board diversity in developing countries.

Keywords: board diversity; gender diversity; education diversity; company performance; Nigeria (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
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