How job-related diversity affects boards’ strategic tasks performance: the role of chairperson

Sadi Boğaç Kanadlı · Pingying Zhang · NADA KORAC KAKABADSE

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Gender Diversity and Inequality Corporate Finance and Governance Team Dynamics and Performance

Abstract

Purpose Board diversity has been a hotly debated topic in the field of corporate governance. The paper examines the role of board chairperson and its moderating effect on the relationship between job-related diversity and boards’ strategic tasks performance. The purpose of this paper is to add on our body of knowledge about the impact of job-related diversity on boards’ strategic tasks performance. Design/methodology/approach The paper applies the structural equation modeling (SEM) technique to examine survey responses from chief executive officers (CEOs). Both the measurement model and structural model have obtained good results, supporting the appropriateness of using the SEM approach. Findings The findings suggest that there is a positive association between job-related diversity and boards’ strategic tasks performance, which is moderated by a chairperson’s leadership efficacy and the option of a former-CEO as board chair. Practical implications To achieve the intended effect of job-related diversity in boards, policymakers need to be mindful about the importance of the board chairperson. Board chairperson’s characteristics such as leadership efficacy and a former-CEO experience would amplify the positive effect of diversity. Originality/value This research paper contributes to the literature on board diversity, board leadership and strategic management of firms. Findings validated researchers’ concern about the negligence of examining moderating factors in board diversity research. Moreover, results echo the concern that board leadership research should shift the attention from structural aspects to the behavioral issues. Finally, this study is the first to show the positive influence of a board chairperson in disseminating benefits of a diverse board.

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References

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