Board diversity and firm performance: Evidence from the U.K. SMEs

Nermeen Shehata, Ahmed Salhin, Moataz El-Helaly

Research output: Contribution to journalArticle

12 Citations (Scopus)

Abstract

This study examines the relationship between board diversity and firm performance in small- and medium-sized enterprises (SMEs) in the U.K. In particular, we investigate the role of gender and age as two dimensions of diversity. Using a large sample of SMEs (34,798 firms) located in the U.K. and focusing on the period from 2005 to 2013, our results show a significant negative association between each of gender diversity and age diversity, and firm performance. Our evidence yields important insights on the association between board diversity and firm performance, and calls suggestions for increased board diversity into question. A possible explanation for our findings could be due to the fact that our sampled firms are SMEs, whereas those in previous studies have been large enterprises. This research provides insights to entrepreneurs on how to enhance their performance, and to governments and policymakers on the development of rules that would achieve better performance in the SME sector.

Original languageEnglish
Pages (from-to)4817-4832
Number of pages16
JournalApplied Economics
Volume49
Issue number48
Early online date1 Mar 2017
DOIs
Publication statusPublished - 14 Oct 2017

Keywords

  • board composition
  • board diversity
  • Corporate governance
  • firm performance
  • SMEs
  • women on board

ASJC Scopus subject areas

  • Economics and Econometrics

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