Board Diversity and Financial Reporting Quality

ABSTRACT

The study examines the relationship between board diversity and financial reporting quality between 2014 to 2023. The panel least squares techniques was employed to empirically examine the relationship. The study found out that board gender diversity has a positive insignificant relationship with financial reporting quality; Age diversity of board members has a positive significant relationship with financial reporting quality; Nationality diversity of board members has a positive insignificant influence on financial reporting quality; Ethnic diversity of board members has positive insignificant relationship with financial reporting quality. The study recommends that the advantages of gender diversity in enhancing corporate governance, decision-making procedures, and ultimately the quality of financial reporting should be explained to bank board members and top executives. To increase the number of women on boards, banks should undertake proactive diversity programs. Deposit money banks must examine their practices regarding board composition to make sure that a variety of ages and backgrounds are represented. Furthermore, despite the fact that nationality diversity did not show up as a key factor impacting the quality of financial reporting, banks should still take diverse viewpoints into account by appointing board members from other nationalities. This may support a more comprehensive method of decision-making and governance. Finally, Banks should establish inclusive policies that guarantee representation from a range of ethnic origins in order to promote ethnic diversity on boards.