The effect of gender diversity and board size on firm performance indicators among Norwegian Public Limited companies
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Purpose: The board of directors plays a role in the central mechanism in the implementation of the principles of corporate governance (Paul et al., 2011). Board size, as one of the major characteristics of the board that have influence on value of the company, defined as the number of directors in the board of the company. Another vital element of corporate governance is board gender diversity, which is defined as the perception of women in the board of directors (Campbell & Mínguez-Vera, 2008). The intention of the thesis is to examine the impact of the number of women in the board room and board size on firm performance in Norwegian Public Limited firms in 2017. The main research questions addressed in this study are: 1) Does gender equality in the board of directors have a positive effect on firm outcome in Norwegian PLC? 2) Does a large board size have a positive effect on firm outcome in Norwegian PLC? Design/methodology/approach: The population of the study comprises 153 Norwegian Public Limited firms. According to the research design and purpose of the research, both exploratory and descriptive research design was used. Moreover, we concluded that crosssectional analysis fits the most for our type of study as we are investigating the link between board characteristics of Norwegian Public Limited companies and their firm performance indicators at a point in time. The end of 2017 is used in the study since all the annual reports for this year were published at the beginning of our research. In order to estimate the model, the regression analysis was used by SPSS statistical software package. Findings: The findings showed different results for the full data set and for separately manufacturing and service industries, which can be explained by distinguish features that are characterized for different industries. Based on this research, there is evidence of a negative link between gender equality indicator and return on asset among Norwegian Public service companies (Appendix C) which were not found among both all Norwegian Public companies and Norwegian Public manufacturing companies (Appendix D). However, the number of previous studies showed opposite findings, which can be explained by the limitations of their studies, different markets and different time period. Conflicting evidence were found about the board size-return on asset relationship. From the analysis, the relationship is positive between large board size and the firm performance indicator among both Norwegian Public limited firms and manufacturing industry, meanwhile there is no evidence of neither positive nor negative link between board size and return on asset among service industry.