Do investors value board ethnic diversity? A Canadian study

Abstract

The purpose of this study is to examine whether investors take the ethnic diversity of boards of directors into account. Based on a sample of 563 Canadian firms listed on the Toronto Stock Exchange (TSX) for fiscal years 2019 to 2021 inclusively, our results suggest that investors positively perceive the nomination of a greater number of visible minority board members. However, the study findings also show that the impact of ethnicity on investors’ perception is nearly 50 percent less than the impact of gender diversity. The study conducted in the Canadian context corroborates the results observed in some previous work by confirming the positive impact that gender and ethnic diversity can have on business performance.