The advantages of board diversity: an empirical analysis of the Italian market

This paper analyses the relationship between board diversity (understood as the diversity of gender and nationality) and some board operating performance profiles which are relevant to the effective implementation of the monitoring function. The survey was carried out on a sample of 237 Italian listed companies during the period 2007-2009. The results obtained show a positive relationship between monitoring activities and the presence of women on the board of directors and an inverse relationship between the number of board meetings and the presence of foreign directors. Concerning the Audit Committee, the results highlight a direct relationship between the number of committee meetings and the number of female directors, while the relationship between the number of foreign directors and the meetings of the Audit Committee is not significant. The link between board diversity and cost of equity was also investigated: the results show an insignificant statistical link both in relation to the number of women and the number of foreign nationals on the boards.