The role of national culture in the impact of board gender diversity on firm performance: evidence from a multi-country study

• Published in: Equality, Diversity and Inclusion: An International Journal Vol. 40; no. 5; pp. 631 - 650
• Main Authors: Naghavi, Navaz, Pahlevan Sharif, Saeed, Iqbal Hussain, Hafezali Bin
• Format: Journal Article
• Language: English
• Published: Birmingham Emerald Publishing Limited 08-06-2021; Emerald Group Publishing Limited
• Subjects: Boards of directors; Conformity; Corporate culture; Corporate governance; Decision making; Directors; Females; Gender; Governance; Individualism; Masculinity; Multiculturalism & pluralism; Organizational culture; Organizational effectiveness; Organizational performance; Social norms; Sociocultural factors; Uncertainty; Women; Firm performance; Board diversity; Gender; Corporate governance; National culture
• ISSN: 2040-7149; 2040-7157
• DOI: 10.1108/EDI-04-2020-0092

PurposeThis study seeks to add more insights to the debate on “whether”, “how”, and “under which condition” women representation on the board contributes to firm performance. More specifically, the current study aims to investigate if the effect of board gender diversity on firm performance is dependent on macro factors of national cultures.Design/methodology/approachThe authors used the generalized method of moments regression and a data set consists of 2,550 company year observations over 10 years.FindingsThe results indicated that cultural variables interact with board diversity to influence firm performance. Having women on the board in countries with high power distance, individualist, masculine and low-uncertainty avoidance culture influences the firm performance negatively.Originality/valueThe findings indicate that the effects of corporate governance structure on firm performance depends on culture-specific factors, providing support for the argument that institutional norms that are governed by cultural norms affect the effectiveness of corporate governance structure.