Drawing on the notion of faultlines – a hypothetical dividing line that splits a group
into two or more subgroups based on the alignment of one or more individual
attributes – this thesis proposes a new approach to the measurement and
assessment of board diversity to understand how high(er) performing boards can
be built i.e., the multi-dimensional diversity index (MDI). The proposed MDI
captures the joint effect of differences in director attributes at four diversity levels
for 26,743 directors, namely: (i) surface (or baseline); (ii) identity; (iii)
demographic; and (iv) meso-level. The current study uses three-stage least
squares (3SLS) with a panel of 3,357 FTSE All-Share index non-financial
companies from 2005 to 2018. To this end, a key implication of this study – and
by extension, the proposed MDI – is that it challenges the conventional notion
that boards are improved ‘enough’ by focusing on the micro-dimension and
increasing stand-alone diversity attributes, such as gender. Collectively, this
study’s results suggest that a well-diversified board incentivises managers to
disclose more information on social and environmental activities in contrast to
firms with an extreme faultline score. The results show that highly effective boards
with a moderate faultline score at meso-level diversity (e.g., identity, information,
and non-demographic attributes) lead to better accounting profitability, corporate
value, and market-based performance. Remarkably, the present study finds that nationality diversity per se positively impacts corporate performance; in contrast,
the dominance of male directors hinders firm performance significantly.
| Identifer | oai:union.ndltd.org:BRADFORD/oai:bradscholars.brad.ac.uk:10454/19108 |
| Date | January 2021 |
| Creators | Omara, Hossam K.A.A. |
| Contributors | Elshandidy, Tamer, Adkins, Roger, Sharma, Abhijit |
| Publisher | University of Bradford, School of Management |
| Source Sets | Bradford Scholars |
| Language | English |
| Detected Language | English |
| Type | Thesis, doctoral, PhD |
| Rights | <a rel="license" href="http://creativecommons.org/licenses/by-nc-nd/3.0/"><img alt="Creative Commons License" style="border-width:0" src="http://i.creativecommons.org/l/by-nc-nd/3.0/88x31.png" /></a><br />The University of Bradford theses are licenced under a <a rel="license" href="http://creativecommons.org/licenses/by-nc-nd/3.0/">Creative Commons Licence</a>. |
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