The Impact of Leadership Diversity on Firm Performance in Singapore

The intersection of sustainability and corporate governance is particularly evident in leadership diversity, which has gained increasing prominence in recent years. The central question of leadership diversity's impact on firm performance remains open, including for Asia, which has been relatively less-studied. This paper seeks to contribute to this literature, adopting a multi-dimensional view of leadership diversity in Singapore's public-listed companies. We examine diversity in boards and senior management combined, in order to better understand the impact of diversity among firm strategic leadership. Based on random effects regression analysis using data from 577 companies, our results generally provide support for a beneficial diversity impact. Gender, age, and education leadership diversity were found to have a positive influence on financial performance. We further found gender diversity and performance to have an inverted U-shaped relationship, with the inflexion point being gender parity. This suggests a potentially important role for gender parity in firm leadership governance.

Automated summary

The intersection of sustainability and corporate governance is particularly evident in the increasing prominence of leadership diversity. This study contributes to the literature by examining leadership diversity in Singapore's public-listed companies. The results suggest that gender, age, and education diversity have a positive impact on financial performance. Gender diversity and performance follow an inverted U-shaped relationship, with gender parity playing a potentially important role in firm leadership governance.