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Relationship of board diversity with firm’s financial performance: The case of publicly listed companies in China
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David Qian, Wahed Waheduzzaman 
, Sarod Khandaker
This work is licensed under a Creative Commons Attribution 4.0 International License.
Abstract
This study examines the impact of board diversity including the gender, nationality, and independence of board members on the financial performance of publicly listed companies in China. This study uses a sample of 206 publicly listed companies on the Shanghai Stock Exchange and the Shenzhen Stock Exchange in China to measure the impact of board diversity on their financial performance. Organizational financial performance is measured with the widely-used accounting-based measurement tool return on asset (ROA), and the market value measurement tool Tobin’s Q. After applying a hierarchical regression analysis this study finds that women on the board impact positively on firm’s financial performance while measures by ROA, but not by Tobin’s Q. The study also finds that the nationality of directors and independent board membership is found to have no significant influence on firms’ financial performance. This study has implications on the business firms to develop the strategic guidelines of board composition to ensure the effectiveness and profitability of their companies.
Keywords: Board Diversity, Corporate Governance, Financial Performance, Foreign Directors, Independent Directors, Women Directors
Authors’ individual contribution: Conceptualization — D.Q.; Methodology — D.Q., W.W., and S.K.; Formal Analysis — W.W. and S.K.; Writing — Original Draft — D.Q., W.W., and S.K.; Writing — Review & Editing — D.Q., W.W., and S.K.; Supervision — D.Q.
Declaration of conflicting interests: The Authors declare that there is no conflict of interest.
JEL Classification: G30, G32, M42, M49, O16
Received: 14.08.2021
Accepted: 30.11.2021
Published online: 01.12.2021
How to cite this paper: Qian, D., Waheduzzaman, W., & Khandaker, S. (2021). Relationship of board diversity with firm’s financial performance: The case of publicly listed companies in China [Special issue]. Corporate Ownership & Control, 19(1), 229–240. https://doi.org/10.22495/cocv19i1siart2
