Literature Review The characteristics of gender diversity in the boardroom and their impact on firm performance post Lord Davies Report (2011-2014) 1.INTRODUCTION 2.THE LITERARURE REVIEW 2.1Agency theory perspectives on Gender diversity 2.2Resource Dependence theory perspectives on Gender diversity 2.3Behaviouraltheory perspectives on Gender diversity 2.4Evidence of empiricism on Gender diversity research
This proposed research will investigate the relationship between the corporate performance and gender diversity in a sample of 30 FTSE 100 companies for the period post Lord Davies Report (2011-2014). It will also explore the perspectives, which women bring to the board and it will focus on the following research question: RQ: An examination of the characteristics of gender diversity in the boardroom and their impact on firm performance? Sub-questions:
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The overall structure of the literature review, takes the form of 2 Sections, including Introduction and Conclusion. A considerable amount of literature has been published on theoretical foundation of the proposed research. These theories have been dominated by Agency theory, Resource Dependency theory and Behavioural theory.
Carter at el (2003) have reported that there is relationship between board diversity and firm value in the context of agency theory, as outlined by (Fama, Jensen, Michael University of Chicago,Center for Research in Security Prices, 1982). Agency theory is based on the antagonism between the Agent (the board) and the Principal (shareholders) when their interests do to not coincide (Berne & Means, 1932; and Jensen & Meckling, 1976). Conflict between the Agent and the Principal more likely to happen when the company does not perform as well as it could. Carter at el (2003) suggest the gender diversity enhances the boardâ€™s ability to monitor top management and motivate them to increase companyâ€™s value. In addition to this, Carter at el (2003) indicate that women more likely to ask the difficult questions in the boardroom than men, which could improve the boardâ€™s independence (Campbell and Miguez-Vera, 2008). The agency theory views board of directors as an internal control mechanism for safeguarding shareholder interests from managerial opportunism (Hillman & Dalziel, 2003).
The Resource Dependence theory (RDT) emphasizes the differences in board composition that may impact upon companiesâ€™ performance. The RDT maintains that the board is an essential link between the firm and the external resources that a firm needs to maximise its performance (Pfeffer &
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