Title: Does board diversity affect firm performance? Evidence from the Italian financial sector

Authors: Romilda Mazzotta; Giovanni Bronzetti; Maria Assunta Baldini

Addresses: Department of Business Administration and Law, University of Calabria, Via P. Bucci – Rende, Italy ' Department of Business Administration and Law, University of Calabria, Via P. Bucci – Rende, Italy ' Accounting and Finance Division, Economics and Management School, University of Florence, Via delle Pandette 9, Building D6, 50127 Florence, Italy

Abstract: The aim of the study is to examine the effect of diversity in the board of directors on the performance of the listed Italian financial institutions. The sample is a data set of 177 firm-year observations covering 2011 to 2014. The performance of the firm is measured by Tobin's Q while board diversity is analysed considering the percentage of female and foreign directors on the board (or their conjoint presence as a proxy of overall demographic diversity) and task-diversity is measured by board interlocking directorship and busy directors. Findings suggest that female directors have no effect on firm performance. Foreign directors and interlocking directorship have, instead, a positive statistically significant relationship with performance while we find a negative statistically significant relationship between busy directors and performance. When we consider the overall demographic diversity on the board we observe that it is positively and significantly related to the performance of the financial firm.

Keywords: financial institution; board of directors; board diversity; Italy.

DOI: 10.1504/IJBGE.2017.085244

International Journal of Business Governance and Ethics, 2017 Vol.12 No.1, pp.65 - 89

Received: 07 Jul 2016
Accepted: 06 Mar 2017
Published online: 17 Jul 2017 *

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