A divers board of directors and the financial results

Abstract

In this paper, it has been tried to uncover significant test results in relation to how diversity variables can have a positive effect on the economic results measured by Return on the assets (ROA) and Tobins Q.
To do so, there have been uncovered in total 450 observations from various public traded companies in Denmark in the period 2018-2022. To find data Bloomberg has been used as a tool to find the financial information and the ratios in this paper. To create the overview over the composition of the board of directors, it has been manually examined in the annual reports. There has been included parameters such as age, gender and nationality of the directors - as well as the total size of the board of the directors in my analysis.
Hereafter a regression analysis has been made by using the Fixed effects panel data method. Even though there are multiple studies that shows a positive or negative effect on the financial results when measuring, making regression analysis using diversity measurements as the independent variable, this paper has not been able to show any significant results.
As a result, the paper cannot conclude a positive or negative effect on the company’s financial results when using four different diversity measurements. However, just because this study cannot conclude it, it does not mean that there is no link between financial results and these diversity measurements.