Effect of board diversity on firms performance
INTRODUCTION
One of the most significant governance issues currently facing the managers, directors, and shareholders of the modern corporation is the gender, racial, and cultural composition of the board of directors. The issue has taken on a high public profile as a result of reports in the popular press, shareholder proposals from advocacy groups, and policy statements from major institutional investors. This is simply stated as Board of diversity which means different things to different people. Among the types of diversity commonly described are: gender, national origin, race, sexual orientation and viewpoint. In my report I have selected three companies and have focused on “The Impact of board of diversity on the company performance’. In my report I have mostly concentrated on gender, educational and age diversity of the board of directors.
Board of directors is a body of elected or appointed members who jointly oversee the activities of a company or organization. It is the most important decision-making body in a corporation. It has very defined roles and responsibilities within the business organization. Essentially it is the role of the board of directors to assess the overall direction and strategy of the business. It is solely responsible for approving major strategic and financial decisions, such as mergers and acquisitions and changes in capital structure, and also for the most important task of all, which is to hire and fire top executives. Effective boards build capabilities within themselves and their organizations that allow them to do both protect existing assets (compliance role). A board is a group of diverse individuals who have different biases and prejudices and whose behavior is affected by social constraints and power relations. This perspective suggests that director heterogeneity plays a key role in how boards function. In contrast, most researchers in economics consider the board as a single entity. The only heterogeneity
One of the most significant governance issues currently facing the managers, directors, and shareholders of the modern corporation is the gender, racial, and cultural composition of the board of directors. The issue has taken on a high public profile as a result of reports in the popular press, shareholder proposals from advocacy groups, and policy statements from major institutional investors. This is simply stated as Board of diversity which means different things to different people. Among the types of diversity commonly described are: gender, national origin, race, sexual orientation and viewpoint. In my report I have selected three companies and have focused on “The Impact of board of diversity on the company performance’. In my report I have mostly concentrated on gender, educational and age diversity of the board of directors.
Board of directors is a body of elected or appointed members who jointly oversee the activities of a company or organization. It is the most important decision-making body in a corporation. It has very defined roles and responsibilities within the business organization. Essentially it is the role of the board of directors to assess the overall direction and strategy of the business. It is solely responsible for approving major strategic and financial decisions, such as mergers and acquisitions and changes in capital structure, and also for the most important task of all, which is to hire and fire top executives. Effective boards build capabilities within themselves and their organizations that allow them to do both protect existing assets (compliance role). A board is a group of diverse individuals who have different biases and prejudices and whose behavior is affected by social constraints and power relations. This perspective suggests that director heterogeneity plays a key role in how boards function. In contrast, most researchers in economics consider the board as a single entity. The only heterogeneity