Exploring the moderating effect of gender diversity and the mediating effect of governance style on the relationship between board characteristics and financial outcome

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Abstract

The purpose of the study was to ascertain the moderating and mediating effect of gender diversity and governance style a piece on the relationship between board characteristics and financial performance. The present study employed the quantitative research approach with an exploratory descriptive research design. Exactly 600 self-administered structured questionnaires were distributed to the eligible respondents to complete between May and June 2022. A response rate of 96 percent (n = 576) was obtained following the distribution of the questionnaire to eligible participants. We adopted the STATA software (version 18) to statistically analyze the primary data obtained in the present study. The partial least squares structural equation modelling (PLS-SEM) technique was used to analyze the data. The results identified governance style as a significant mediator in the relationship between board characteristics and financial performance. Gender diversity significantly influenced only the positive relationship between board independence and governance style. The study provides essential insights into the significance of considering and embracing the relevance of corporate governance dimensions such as board committee, board independence, and board diversity on financial performance, whilst appreciating the moderating and mediating contribution of gender diversity and governance style, respectively, on the board characteristics-financial performance relationship. To the researchers’ knowledge, this study is one of a kind that integrates gender diversity, knowledge management, and governance style into an examination of the effects of corporate governance on the financial performance of public institutions in a developing country’s higher educational context.

Keywords: Corporate Governance, Governance Style, Gender Diversity, Board Characteristics, Financial Performance

Authors’ individual contributions: Conceptualization — F.M.Y.K. and P.R.; Methodology — F.M.Y.K.; Investigation — F.M.Y.K.; Resources — F.M.Y.K., P.R., and L.M.; Writing — F.M.Y.K.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G31, G34

Received: 27.11.2024
Revised: 25.02.2025; 29.03.2025; 21.05.2025
Accepted: 23.05.2025
Published online: 28.05.2025

How to cite this paper: Klu, F. M. Y., Rambe, P., & Mosweunyane, L. (2025). Exploring the moderating effect of gender diversity and the mediating effect of governance style on the relationship between board characteristics and financial outcome. Corporate Board: Role, Duties and Composition, 21(2), 31–44. https://doi.org/10.22495/cbv21i2art3