Board Diversity And Corporate Financial Performance

The emergence of the board of directors is accompanied by the introduction of the concept of the company and the development of the relevant legal system.Since the late qing dynasty,China has introduced the concept of "board of directors" and other related concepts,and referred to the checks and balances and supervision mechanism of the board of directors as "layers of restraint and impartiality in everything".As the representative of shareholders,the board of directors undertakes the functions of supervision,consultation and resource provision,and aims to realize the sustainable development of enterprises,which is an important factor affecting corporate governance.In recent years,investors and regulators around the world have emphasized the importance of board diversity,pointing out that board diversity is conducive to improving board governance and corporate performance.As the pillar industry of our country,real estate is the backbone of our country’s economic development.Chinese real estate industry has entered the transition and adjustment period from the extensive development mode.As the key to determine the survival mode and development direction of corporates,the position of the board of directors is further highlighted.The strategic layout and decision-making of the board of directors have far-reaching significance for the whole industry,society and the country.Therefore,this paper takes China’s listed real estate firms as the research object,and deeply studies the influence of board diversification on corporate performance,which can provide an important thinking direction for the study of the "black box" problem of the two.This paper firstly sorts out and summarizes relevant domestic and foreign literature,then elaborates on the concepts of board of directors,diversification and corporate performance,and analyzes the theoretical basis on which this paper relies.Combined with the characteristics of China’s real estate firms,this paper puts forward the research hypothesis,select and measure the relevant variables.Finally,this paper selects China’s listed real estate firms from 2010 to 2017 as research samples to establish an empirical model of the impact of board diversification on corporate financial performance.Finally,the following research results are obtained:(1)The diversification of the board of directors’ overall structure has no significant impact on the corporate financial performance,but negatively affects the anti-risk level of firms.(2)Individual diversity within the board of directors is signisficantly positively correlated with corporate financial performance,but negatively correlated with corporate solvency performance.In addition,the diversification of professional background and board experience of board members can significantly promote the improvement of corporate financial performance,while the diversification of political background reduces financial performance.(3)When considering both the overall structure of the board of directors and the diversity of internal individuals,the correlation between the diversity of the overall structure of the board of directors and corporate financial performance is not strong,but the diversity of internal individuals significantly improves corporate financial performance,and there is no obvious intermediary effect between the two.(4)When tobin’s Q value is used to measure corporate financial performance,the basic conclusion of this paper remains unchanged,that is,the overall board structure diversification is not strongly correlated with tobin’s Q value,but the internal individual diversification significantly improves tobin’s Q value.(5)In the heterogeneity analysis,the individual diversity within the board of directors of non-state-owned,small&medium-sized or mature real estate firms significantly promotes the financial performance of firms.(6)The distribution of real estate firms in China is regional to a certain extent.The diversity of individuals within the board of directors of real estate firms in first-tier cities has a positive impact on the corporate financial performance.Finally,based on the research conclusions,this paper puts forward two suggestions for Chinese real estate firms to further understand the board of directors and diversify the board of directors,so as to help them improve corporate governance and corporate performance.