Gordini and Rancati delve into what they consider affects board composition and effectiveness of boards for firms to prosper financial gains

Gordini and Rancati delve into what they consider affects board composition and effectiveness of boards for firms to prosper financial gains. This includes the tenure of directors, the share ownerships of board members, the size of board of directors, types of remuneration scheme used and board diversity. Board diversity includes a variety of dimensions such as gender, age, ethnicity, nationality and educational background. All these factors influence a firm’s financial performance only if these elements provide an additional perspective to the board’s decision making. In essence, the presence of women in boardrooms could have a positive effect if they provide input in the decision making process. However if companies with more women on board are not the same as or they are more effective than a company with fewer women on board, it could potentially have a negative impact leading to greater conflicts in boardrooms. So the decision to appoint more female members on board as a requirement by law for gender equality may not be beneficial to the company and therefore corporate governance. This seems to be a valid statement, because if women are not making positive changes by bringing in innovative ideas or in fact making the company worse off, it will not be beneficial for corporate governance. Although this arguably has a sound level of viability, since there is no evidence suggesting women have a negative impact on firms, there is more possibility that they have zero effect rather than any negative impact as such