Does Family Ownership Moderate the Relationship between Board Diversity and the Financial Performance of Saudi-Listed Firms

This paper explores the moderating role of family ownership in the relationship between board diversity and financial performance. The study sampled data of 98 Saudi non-financial companies from 2012 to 2021. The data were analysed using fixed effect regression, while a generalised method of moments (GMM) was employed for a robustness test. The empirical evidence suggests that board gender may not have much relevance in enhancing the financial performance of Saudi firms. In contrast, the research findings emphasised that coupled with stringent monitoring from family ownership, foreign directorship, CEO tenure, and board financial expertise may serve as crucial control mechanisms that can minimise agency costs, leading to higher financial performance. This research modelled how the interaction between family ownership and board diversity attributes may determine financial performance. Hence, the study contributes to the body of knowledge by unveiling a more robust control governance mechanism, particularly in developing economies with ineffective markets for corporate controls.