Social Diversity on Corporate Boards in a Country Torn by Civil War

We examine how social diversity and inclusiveness on corporate boards affect corporate performance and monitoring in Sri Lanka, a country subject to decades of polarization, civil war, and even genocide. Barely more than a decade after the civil war, we find that board social diversity on the basis...

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Bibliographic Details
Published in:Journal of business ethics Vol. 194; no. 3; pp. 679 - 706
Main Authors: Nazliben, Kamil K., Renneboog, Luc, Uduwalage, Emil
Format: Journal Article
Language:English
Published: Dordrecht Springer Netherlands 01.10.2024
Springer Nature B.V
Subjects:
Boards of directors
Business and Management
Business Ethics
Citizenship
Civil war
Corporate culture
Decision making
Education
Education reform
Ethics
Ethnicity
Ethnolinguistics
Gender
Genocide
Inclusion
Linguistics
Management
Minority & ethnic groups
Minority & ethnic violence
Moral dilemmas
Multiculturalism & pluralism
Organizational effectiveness
Organizational performance
Original Paper
Philosophy
Polarization
Quality of Life Research
Religion
Securities markets
Social responsibility
Stock exchanges
Stockholders
Tamil people
War
CEO turnover
Inclusion
Ethnic diversity
Corporate governance
G33
Socio-cultural diversity
G34
Inclusiveness
Gender bias
Corporate performance
Board of directors
ISSN:0167-4544, 1573-0697
Online Access:Get full text
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Summary:We examine how social diversity and inclusiveness on corporate boards affect corporate performance and monitoring in Sri Lanka, a country subject to decades of polarization, civil war, and even genocide. Barely more than a decade after the civil war, we find that board social diversity on the basis of ethnicity, religion, language, gender, and nationality of the board members is positively related to corporate performance, both in terms of stock market performance and accounting returns, and to corporate financial stability. The main positive effects of social diversity derive from ethno-linguistic inclusiveness. The results are confirmed by an instrumental variable approach that addresses endogeneity issues. We find no evidence that inter-personal and moral conflicts or communication problems among board members negatively affect firm performance.
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ISSN:0167-4544
1573-0697
DOI:10.1007/s10551-024-05624-z