Board Committee Diversity and Corporate Investment Behaviour

This study examines how diversifying board committees influence corporate investment behavior, specifically in decision-making and allocation strategies. By committee presence, size, gender representation, and independent and non-executive members, we build a detailed diversity index using data on these committees. Our findings show that higher diversity substantially enhances the quality of long-term strategic investment decisions compared to short-term operational efficiencies. Additional investigations have shown that more diversity maximizes corporate resource allocation, generating optimal investment and investment efficiency levels. These findings highlight the strategic importance of diversity as a contributor to good governance and better financial performance.