The effects of board diversity on the financial performance of commercial banks in Kenya

Abstract

This study examined the relationship between Board diversity and financial performance of commercial banks registered and domiciled in Kenya. Data on Boards’ gender, educational qualifications, study specialization, and board specialization as well as the companies’ financial performance were obtained from the central Bank of Kenya supervisory department where a total of33banks reports was attained. This study used descriptive and explanatory designs that involved gathering data that described the events and then organized, tabulated, depicted and described the data collected. Only secondary data was used. Using the Ordinary Least Squares (OLS) regression, the results show that there is very minimal association between board diversity and financial performance. The results partially concurred with agency and resource dependency theories of corporate governance as well as similar empirical studies. Ensuing implications for theory, policy and practice as well as methodology were also discussed