Gender, ethnic and nationality board diversity and firm performance: a meta-analysis

Purpose The purpose of this study is to explore whether different types of board diversity – gender, ethnicity and nationality – impact firm performance in the same way, and if not, then why that is the case. Additionally, the authors examine how a country’s informal institutions may influence this relationship. The theoretical model in this paper connects diversity in gender, ethnicity and nationality with distinct board contributions in terms of mindsets and access to more information. This study also assesses to that extent the cultural tightness–looseness of a country moderates such a relationship. Design/methodology/approach The authors used a meta-analysis to test the hypotheses. They conducted a systematic literature review, sampling papers published during a 28-year period (1995–2023). The final sample included 160 sources and 398 effect sizes. Findings The authors conclude that all forms of board diversity can contribute to the diversity of thinking styles, but not all can contribute in the same way with unique and private information. As a result, the more private information, the greater the effect on the firm performance. The findings of this study suggest that nationality diversity offers greater access to private information than gender or ethnicity diversity. The authors also found that the level of cultural tightness moderates the relationship between board diversity and firm performance. Originality/value The literature on board diversity as an antecedent to firm performance postulates that diversity is valuable because it allows a diversity of thinking styles. The authors postulate and found that not all types of diversity matter in the same way. Second, they develop the theory surrounding the tightness–looseness framework, showing how increasing levels of tightness are beneficial for the decision-making process in formal decision-making contexts such as the board of directors. The authors discuss the implications of this study’s findings.