Board Diversity, Risk Management and Efficiency Evaluation. Evidence from European Listed Manufacturing Companies

Board diversity can influence the management of different kinds of risks affecting performance. Our research analyzes the relationship between corporate efficiency and board diversity in 451 European listed manufacturing companies for the year 2015. In particular, we investigate the effects on profitability efficiency and risk management of gender inclusion (women and foreigners on boards). In order to assess the profitability efficiency, we rely on a non-oriented, slack-based model for Data Envelopment Analysis, and a logistic regression analysis to identify the effect of diversity management variables. The results demonstrate that the increased presence of women is associated with a higher probability for greater relative efficiency in countries without mandatory gender regulation. The increased presence of foreigners, however, is associated with a lower probability of above-average efficiency.