Exploring the Impact of board of directors’ diversity on corporate performance: does intellectual capital efficiency matter? Primary evidence

A diverse board of directors (BoD) can potentially improve firm’s performance in different ways, such as leveraging the management of intangible resources. Given the growing interest on diversity, this research aims to explore the impact of BoD’s diversity on performance of Innovative Small and Medium Enterprises (ISMEs), simultaneously examining the moderating role played by intellectual capital efficiency (ICE). Hence, it seeks to address the research gap in understanding the still unclear role of BoD’s diversity. A quantitative analysis has been conducted on Italian ISME’s, as defined by D.L. 3/2015. Two distinct models have been employed. The first one analyzes the impact of BoD’s gender diversity on firm performance, using the Blau index as regressor. The second model investigates the influence of BoD age diversity, computed by dividing the standard deviation of BoD’s members age by the average age. Pulic’s VAIC™ is included in the interaction term, as a proxy of ICE. Results show a negative and significant relationship between age diversity and performance, while gender diversity does not have any significant effect on it. ICE moderates both relationships. Consistent with critical mass and resource dependency theories, many studies have established a link between BoD’s diversity (in terms of age and gender) and firm performance. Although some publications highlight the benefits of diversity, others show its negative impact or no relationship. Hence, as there is a lack of studies that specifically address the role of board diversity within this nexus, this article focuses on an innovative landscape, understanding the leveraging role of ICE inside these mechanisms. Expanding the research on diversity to ISME’s BoD, outcomes aid in the advancement of knowledge about diversity in the BoD’s composition, increasing awareness of academics, policy makers, and managers.