Purpose – The purpose of this paper is to investigate the effect of board diversity on firmperformance.
Design/methodology/approach – From different theories perspective and based on data collected
about the composition of board of directors in Spanish non-financial firms, the paper determines
statistically the relationship between board diversity and performance for the period 2005-2015.
Findings – The results reveal differences between inside and outside board members in terms of the
performance impact of board diversity. Thus, while age diversity has a positive effect on firm
performance in both, insider and outsider directors, nationalitymix is associated with higher performance
levels just in the case of insiders. In addition, educational diversity seems to have a negative effect on
performance for supervisory directors. On the contrary, the authors do not find any evidence about a
possible influence of gender diversity on performance.
Research limitations/implications – The authors are just taking some board’s attributes, but the
concept of board diversity is a very wide one. In this regard, less traditionalmethodologies that do not rely
on extant archival databases may be necessary to get a deeper understanding of the impact of boards
on firm’s performance.
Practical implications – This study demonstrates that the claim of ‘‘one size fits all’’ often implicitly
stated by regulators and advisors is misleading. Board’s attributes analysis over the boardroom as a
whole turns out in too simplistic conclusions. This is particularly important for regulators: a rigorous
analysis should be performed before including general recommendations about, for instance, the age or
the board tenure in corporate governance codes.
Social implications – As diverse boards contribute to a greater social value, the paper analyses the
performance consequences of demographic diversity.
Originality/value – The paper analyses the firm performance impact of diversity among insider
directors, on the one hand, and outsider directors, on the other. Although there is a clear difference
between the roles assigned to insider and outsider directors, to the authors’ knowledge, there has been
no analysis of the firm performance effect of the diversity of each type of director using the same sample
andmethodology.
