Abstract
We examine how social diversity and inclusiveness on corporate boards affect corporate performance and monitoring in Sri Lanka, a country subject to decades of polarization, civil war, and even genocide. Barely more than a decade after the civil war, we find that board social diversity on the basis of ethnicity, religion, language, gender, and nationality of the board members is positively related to corporate performance, both in terms of stock market performance and accounting returns, and to corporate financial stability. The main positive effects of social diversity derive from ethno-linguistic inclusiveness. The results are confirmed by an instrumental variable approach that addresses endogeneity issues. We find no evidence that inter-personal and moral conflicts or communication problems among board members negatively affect firm performance.
Original language | English |
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Pages (from-to) | 679-706 |
Number of pages | 28 |
Journal | Journal of Business Ethics |
Volume | 194 |
Issue number | 3 |
Early online date | 14 Mar 2024 |
DOIs | |
Publication status | Published - Oct 2024 |
Keywords
- Socio-cultural diversity
- Inclusiveness
- Inclusion
- Ethnic diversity
- Gender bias
- Corporate performance
- CEO turnover ·
- Corporate governance
- Board of directors
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Social qualities of corporate managers in Sri Lanka, April 2011–March 2018
Nazliben, K. K. (Creator), Renneboog, L. (Creator) & Uduwalage, E. (Creator), DataverseNL, 23 Oct 2024
DOI: 10.34894/0thqm5, https://dataverse.nl/citation?persistentId=doi:10.34894/0THQM5
Dataset