The influence of board diversity on financial performance : an empirical study of Asia-Pacific companies

Abstract

This study investigates board diversity and its influence on financial performance. The main purpose of the study is to examine whether nationality and gender diversity influence financial performance as measured by Tobin’s Q. The study examines the biggest 50 Asia-Pacific companies according to Forbes Magazine. Data analysis is performed using Ordinary Least Square (OLS) and Two-Stage Least Square (2SLS) regressions analysis. The results show that gender diversity of board member has a positive influence on financial performance. However, nationality of board member contributes no significant influence on financial performance. In addition to the empirical findings supporting board diversity, I also emphasize that an economic objective should not be the only reason for increasing board diversity.