ABSTRACT We examine how governance mechanisms influence strategic change, with particular focus on the role of board gender diversity (BGD). Using a data set of 242 Italian nonfinancial listed firms from 2013 to 2023, we specifically investigate how governance mechanisms, such as board size , board independence , CEO gender , ownership concentration , and CEO duality , affect strategic change. Our results, grounded in agency and resource dependence theories, show that board independence, CEO gender, ownership concentration, and BGD each contribute positively to strategic change. In contrast, larger boards and CEO duality have a negative influence. Importantly, we find that BGD modifies the impact of other governance mechanisms on strategic change. Gender‐diverse boards accentuate the positive effects of board independence, CEO gender, and ownership concentration on strategic change while attenuating the negative impact of board size. These results suggest that BGD not only adds value directly but also improves the effectiveness of other governance components. Firms can promote strategic change by optimizing their governance structures, particularly by increasing BGD, which contributes to positive governance outcomes and mitigates the drawbacks of certain governance mechanisms. Practitioners can use these insights to structure their boards more effectively, emphasizing independence, CEO gender, and ownership concentration to drive strategic change. Additionally, firms may reconsider their approach to board size and CEO duality to minimize potential adverse effects on strategic change, leading to practical assessments and potential restructuring of existing boards.
Hussain Muhammad (Mon,) studied this question.