Impact of Board Diversity on Firm Performance

AbstractThe objective of this study is to analyse and understand the connection between firm performance and the demographic diversity of the board. For this study, we combined panel data with the FTSE 100 Index. The Blau index and the coefficient of variations are used to define the board's value for demographic diversity. For our baseline mode, we utilised ROE (Return on Equity) as the dependent variable, and for our robustness test, we used ROA (Return on Assets). According to the study's findings, company performance and demographic diversity are favourably correlated. This study can show that gender diversity has a strongly inverse relationship with ROE and a significantly inverse association with ROA. Additionally, a highly substantial negative association between CEO age and ROA and a highly significant positive correlation between board tenure and ROE are discovered.