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Role of board diversity in driving firm performance

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Board diversity significantly enhances governance and financial performance in Indian firms, especially in innovative capacities.
The study analyzed 300 firms over nine years, discovering that diversity contributes to better decision-making and performance metrics.
Regression analysis highlighted that ESG practices act as positive moderators in the relationship between board diversity and overall performance.
Moving beyond tokenism is crucial, as substantial diversity leads to better outcomes compared to token compliance efforts.

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Analysis shows board diversity enhances performance in Indian firms, suggesting ESG practices improve stakeholder trust.

Chitra et al. (2025) studied this question.

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