CORPORATE GOVERNANCE

(ASSIGNMENT)

Submitted by
RIZWAN AHMED KHAN

(EMBA 2k17)

NUST BUSINESS SCHOOL (NBS),

NATIONAL UNIVERSITY OF SCIENCE AND TECHNOLOGY (NUST), ISLAMABAD, PAKISTAN

 Board Diversity
The relationship between board diversity and firm performance is depending on
the organizations reputation, it may also be established through heterogeneity at
certain organizational levels. As per theory, many reasons have been established
for inclusion of women directors in a company’s board of directors. Ethnic diversity
may also improve directive role through ensuring about the board members have
full collection of key knowledge points in terms of market & customer behavior and
own management concerns to achieve success functionally and socially. According
to social thinkers, blend of different background members helps boards overcome
affinities toward similar thinking. Increased diversity of board members may bring
a diversified team of professionals.
Some of social researchers have the opinion that heterogeneous board may
weaken the decision making because conflict in their intellect based on diverse
experience. However, certainty on this may require further research as type of
decision to be required would ultimately effect the performance of diverse board.
As in one decision w.r.t. diversification of business board may have more
competency because of diversified board and in other case like decision about any
functional issue may not be as effective due to different perceptions.
A major argument in support of management diversity is that a more diverse board
of directors may take decisions while considering a wider range of alternatives.
Female Directors
Women representation in company governance has been the focus of public
discussions among researchers, policy drafters and institutional investors for last
two decades and this context is quite new in Pakistani notion. Recent century has
begun with the women empowerment, equal rights and shoulder comparison with
men in any role including the corporate governance.
If we consider Pakistan, tête-à-tête of female directors as independent non-
executive directors is not usually exist, but normally women in board are who
belongs to the owners family and due to the implementation of the constitutional
requirement by the company’s ordinance. Various founders grasp their family
female directorship only to seize the brawny hold of their family on business and
to crack the difficulty of citizen division to the next generation. The role of females
as board members and top corporate executive in a company, CEO, in driving firm
performance has become a very topical issue, especially in the current times of
economic catastrophe in which largely attributed to unsound risk management
practices.
The scarcity of research on the underlying mechanisms and moderating effects in
the relationship between board gender diversity and firm performance pinpoints
the need for more efforts in this direction.