Board Diversity And Corporate Performance

In recent years,China's stock market has been turbulent.Many listed companies have been frequently struck by ST,and some listed companies have even gradually taken the road of delisting.To be good at work,we must first sharpen our tools.The board of directors is the company's top management,and its decisions affect the company's operations and development.In 2018,Fortune Chinese Website and Aon Hewitt released the first list of the top 50 China's best board of directors.The Golden Roundtable,hosted by Board of Directors Magazine,is also evaluating the best boards of listed companies.And they both considered the board diversity in the process of evaluating the best board.Can a diverse board improve the corporate's performance? Most of the existing researches explore the relationship between the diversity of boards' individual characteristic and the corporate performance,but rarely consider the diversity of the boards' different characteristics.Based on this,this article takes Shanghai and Shenzhen A-share listed companies from 2009 to 2017 as the research sample,and explores the relationship between board diversity and corporate performance.It also discusses whether there are differences when listed companies are in different natures of property rights and different sizes.In addition,the board diversity indicators in this article are comprehensively constructed with eight factors: board gender,age,educational background,professional background,overseas background,political background,academic background,and financial background.In order to test which board characteristic is responsible for corporate performance,we examined the relationship between the diversity of each board characteristic and corporate performance.Further,we explores the internal mechanism of how board diversity affects the corporate performance.For example,corporate investment distortions and corporate innovation.Finally,this article also sets up the scenario factor,named product market competition,to discuss whether the relationship between board diversity and corporate performance is consistent when the product market is highly competitive and relatively intensive.The results find that,board diversity can significantly improve corporate performance,and this impact is not affected by the nature and size of the corporate.In the eight board characteristics that make up the board diversity,basically the diversity of each board characteristics can significantly affect the company's performance.In addition,this article also finds the intermediary roles of corporate investment distortion and corporate innovation.Board diversity can improve corporate performance by reducing the corporate's underinvestment,increasing R&D investment and improving R&D output,but overinvestment cannot be the intermediary role.Finally,this paper examines the moderating role of product market competition and finds that whether the product market competition is fierce or not,board diversity can improve corporate performance,but when the product market competition is fierce,the correlation coefficient of the main effect is smaller.In summary,this article explores the impact of board diversity on corporate performance,and finds that mediating effects of underinvestment,R&D investment,R&D output,and the moderating effect of product market competition.This paper has expanded related researchs on board and corporate governance.It also provides relevant suggestions for the government to formulate relevant policies and the companies to improve performance.