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Diversity Matters: A Study on the Relationship between Board Career Diversity and Firm Performance
| Content Provider | MDPI |
|---|---|
| Author | Kim, Daniel Sungyeon Sul, Hong Kee |
| Copyright Year | 2021 |
| Description | Are shareholders better off hiring directors with in-depth specialties in the company’s core business or hiring directors with broader perspectives? This study addresses the question by investigating the relationship between directors’ career diversity and firm performance. It employs Tobin’s Q, total shareholder return, and return on equity as measures of firm performance. Accordingly, board career diversity has a significant and positive effect on firm performance. Moreover, we find that board directors with diverse industry experiences create value for firms via advisory (e.g., R&D and capital expenditures) and monitoring (e.g., equity compensation) roles. Given that diversity in career matters, corporations can seriously consider board composition and promote career diversity among board members. |
| Starting Page | 9674 |
| e-ISSN | 20711050 |
| DOI | 10.3390/su13179674 |
| Journal | Sustainability |
| Issue Number | 17 |
| Volume Number | 13 |
| Language | English |
| Publisher | MDPI |
| Publisher Date | 2021-08-27 |
| Access Restriction | Open |
| Subject Keyword | Sustainability Business and Management Board of Directors Diversity Industry Experience Firm Performance |
| Content Type | Text |
| Resource Type | Article |
