Is Board Diversity Matters for Corporate Firm Performance?Empirical Evidence from Family Firms

Abstract

Family companies have a long history and a well-established reputation everywhere around the globe. Prevailing families have a solid incentive to derive personal benefits via controlling stake resource manipulation and to reduce minority shareholders' income.A healthy governance system guarantees against these actions. This study broadens the literature by looking at the effect of female directors on the performance of Pakistani family enterprises. For the duration 2010-2017, a sampling frame of 212 Pakistani listed was chosen. The research took a quantitative approach and employed panel data methodology. The data was analyzed using a static and dynamic method, having random, fixed and GMM models. Results shows that hiring of female directors has a positive effect on the value of family businesses. Board size has a detrimental influence on a firm's value and has poor governance. Control factors include dividend payment, the board size, and leverage. Finally, the research provides governance recommendations for investors and other stakeholders.