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Social diversity on corporate boards in a country torn by civil war

Nazliben,Kamil Korhan
; 
Renneboog,Luc
; 
Uduwalage,Emil
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.
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Publisher Copyright: © The Author(s) 2024.
Date
2024-10
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Tilburg University Research Output Collection
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Keywords
Socio-cultural diversity, Inclusiveness, Inclusion, Ethnic diversity, Gender bias, Corporate performance, CEO turnover ·, Corporate governance, Board of directors, SDG 5 - Gender Equality, SDG 10 - Reduced Inequalities
Citation
Nazliben, K K, Renneboog, L & Uduwalage, E 2024, 'Social diversity on corporate boards in a country torn by civil war', Journal of Business Ethics, vol. 194, no. 3, pp. 679-706. https://doi.org/10.1007/s10551-024-05624-z
URI
https://hdl.handle.net/20.500.14602/80965
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