Does Gender Diversity on Corporate Boards Affect Firm Performance?

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Dylan Aaron Kaseram

Abstract

This current literature review focuses on the diversity of members on the board of directors in corporations. By exploring contemporary literature in finance, this article seeks to understand the effects of board member gender diversity on firm financial performance. Firstly, diversity in board members is shown to have mixed results on firm performance. Secondly, heterogeneous board members’ different life experiences and demographic characteristics lead them to solve problems and make decisions in various ways which could ultimately impact the financial performance of the firms they serve. Thirdly, gender diversity is a topic that has gained much attention on modern corporate boards. Appointing women to executive boards has proven to have effects on firm performance. In addition, governments around the world have taken action to promote gender equality by enacting gender quota legislation or by implementing codes of good governance. Furthermore, when appointed to the executive board, women face additional difficulties once in the boardroom. Lastly, the effects of gender diversity on firm performance are found to be mixed and varied.

Article Details

Section
Interdisciplinary