Author(s): Nargus Batool, Qasim Saleem, Zaheer Abbas
Purpose-The-Study has aim to investigate how different board diversity attributes like age, gender, education and experience effect on firm-performance of non-financial-firms that is listed in Pakistan-stock exchange (PXS). Design/methodology/approach- A total of 100 non-financial firms listed in Pakistan stock exchange (PSX) were selected. The data were collected form the non-financial firms during the period of 2012-2020(n=540). The data were analyzed using GMM model to test the effect of board diversity on firm performance. Findings-Based on Resource Dependence theory and Behavioral Agency theory this study found that board gender and board education has significant relationship between firm performance and board age and board experience has insignificant relationship with firm performance. Therefore, this research suggests that policy makers should formulate regulations and support the Diversity of Directors. Research limitations-The present study include the demographic variables of board diversity like age, gender, education and experience; but excluded nationality and religion. The results recommend that board diversity in corporate boards is an attractive research topic in developed and under developed countries because diverse board of directors can carry the different knowledge, skills, abilities, expertise and experience in the firm that ultimately improving the firm performance. Corporate governance mechanisms are still needed in developing countries especially in Pakistan. This research paper provides insights to investors and shareholders on how to enhance their firm performance in term of financial growth. Originality/value-According to the author’s knowledge, this study delivers the empirical analysis of the relationship between board diversity and firm performance from the side of non-financial firms. The results will give both theoretically and empirically to the prevailing knowledge.