Ethnic and Gender Diversity in Boards of Directors and Their Relevance to Financial Performance of Malaysian Companies

• Main Authors: Marimuthu, Maran, Kolandaisamy, Indraah
• Format: Citation Index Journal
• Published: 2009
• Subjects: HG Finance
• Online Access: http://eprints.utp.edu.my/12045/1/Ethnic%20and%20Gender%20Diversity%20in%20Boards%20of%20Directors%20and%20Their%20Relevance%20to%20Financial%20Performance%20of%20Malaysian%20Companies.pdf; http://eprints.utp.edu.my/12045/
• Institution: Universiti Teknologi Petronas

The purpose of this paper is to empirically examine the effect of demographic diversity on boards of directors with regard to firm financial performance. This paper uses secondary data of non-financial listed companies over the period 2000 to 2006. Relevant concepts, propositions, hypotheses and control variables are specially developed to meet our requirements. Demographic diversity is represented by ethnic and gender diversity and performance is measured by return on asset (ROA) and return on equity (ROE). A series of OLS regressions using on the cross-sectional data are also presented. The results seem to be quite inconsistent to prove the relevance of diversity among the board members with regard to financial performance.