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Board Diversity: Impact on Firm Environment & Financial Performance

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Introduction: Board Diversity's Impact on Firm Performance

Most of the organizations have diversity in their boardrooms. It is basically the result of searching the candidates in an exceptional way and recruiting them in well managed organizations. The diversity of the board covers everything including age, background and gender as well as the experience and the skills (Aggarwal et al.2019). The diversity in the board is necessary so that the boards of the organisations can ensure that all the candidates can perform at their level best and their Performance can be beneficial for the organization. It is proved that the diversity in the board can be very beneficial for the organisation. The gender and age in the diversity play an important role that positively influence the disclosure of the information. The cultural diversity helps the employees of the organizations to recognise themselves. It also cam improve the performance of a team by ensuring that each and every team has their own set of talents that are quite different. It can also improve the relations with the employees and their individual Performances also. Diversity also improved the Atmosphere of the workplace as all the employees feel accepted and valued. They also feel happier in their workplace. It has been proved that the companies having the diversity in their workplace have the lower rates of turnover.

The impact of board diversity on firm environment

According to the data of the company's diversity helps to improve the performance of the organization as well as the environment of the organizations. It depends on the workers how they create an atmosphere inside the organization. When the organisational senior decides to lead the team that has diversity (Marinova et al. 2016). The diversity inside the organisation sends the signal to the present and future workforce of the organizations that ensures the equity and opportunity of the organization. There are many demographics characteristics that help to leave an impact on the performance of the organisation including age, gender, ethnicity, race and others. Other environmental issues such as climate change, the emission of Carbon dioxide can affect the atmosphere of the firm. The diversity in the atmosphere can introduce multiple points of view. It has multiple impacts on the firm. The diversity shows the positive relationship between the employees and the employers. Business leaders often make the diversity of the case of the business. The employees of the organizations try to meet the expectations. The employees get more satisfied and lack of diversity creates the environment that is hostile. It can increase the turnover of the firm.

Mixture of age

The structure of the age affects the workforce of the company. The effect of mixture of age analysed the Performance of the employees individually and it is quite frequent. Organizational productivity affects productivity. The organisational changes depend on the diversity of the age. There are different models that analyse the effects of the organization. It provides a formal structure that controls the costs and benefits of the services. The productivity of the organizations does not decline the average age of workforce. The productivity of the individuals changes with the diversity of the age. Age diversity has positive effects such as different ideas and different opinions. The experience comes with maturity (Kim et al.2016). Besides that, the young people have some nature for exploring new ideas. So, it can be said that the age mixture is important enough for the organization.


The environment and gender affect the environment of the firm greatly. The theory of gender diversity has a positive effect on the bottom line. The most diverse genders have to experience profitability. The diversity of gender increases the profitability by 5- 20 %. It also enables the enterprises to conquer the wide talent pool with different types of skills. The composition of a team influences the Performance of the team. Gender equality contributes to the long-term changes of the structure. It also resulted in poverty reduction. Due to the inequalities of gender, environmental challenges have different impacts on men, women, girls and boys. The women represent the two third of poor in the all over region (Crane et al.2019). Their economic insecurity is one of the parts of discrimination in the unemployment.


The firm understands the value of recruiting and retaining the employees in the diverse world. The workers play a critical role to adapt the ability of the company. The company grows and sustains a competitive advantage (Bowman et al. 2018). Though some companies fail to recognise the benefits of having a racial and ethnical diversity in their workforce. The prejudices and stereotypes can lead to discrimination in the process of hiring. The diversity of ethnicity gains the welfare and efficiency of the workers. It has reduced the cost of the hiring. It has fewer disputes internally. It has also improved the accessibility of the new and diverse customers. It has increased the revenue and also makes the productivity higher. It has also increased innovation. The company can develop the new products and services. They also improve the reputation of the company. The organisation has great flexibility and adaptability. The company can manage the risks efficiently. The companies can gain all those benefits for the legal compliances.

Climate change

Besides the physical risks, the impact of climate Change can affect the organisation. The other natural calamities such as the events of weather, supply of the shortage of water can cause the scarcity of water. Society also responds to climate change. The changes in technologies, markets and regulation can affect the organisation. The changing weather can be dramatic risks for the businesses in the organisation. The emission control system can be so expensive so the public companies are required to report them as the business costs. Climate change alters the behaviours of the consumers. Some companies have been required to spend some amounts of money to upgrade the polluting facilities.

The emissions of Carbon dioxide

The Cap-and-trade policies are aiming at lower carbon emissions by limiting the amount of pollution so that the company can emit and allowing the companies to sell any of their allowances that are unused. The carbon emissions can contribute to many diseases such as respiratory systems from smog and air pollution. The weather events that are extreme, and the system of food supply can increase the wildlives besides that the greenhouse gases can cause climate change. The carbon emissions can reduce the cost of the energy . The cutting of carbon emissions can be beneficial for the company. The company can switch to cheaper and renewable energy and besides that the company will be able to manage and reduce the budget. In this way, the business becomes more profitable.

Professional and ethical duties of accountants and finance managers

The finance managers and the accountants should follow the code of ethics. The fundamental principles should be within the code. The objectivity, integrity and professional competence can affect the business. It establishes and reflects the recognition of profession. The accountant should have enough competence. Besides that, the companies also maintain the level of professionalism. The finance managers also try to develop the knowledge and skills so that they can develop the knowledge and skills. The finance files should be kept confidential and the finance managers should keep the data confidential. They should keep the data confidential so that people cannot be able to misuse the data. The integrity and credibility should be kept. The high ethical standards are making critical the process of maintaining public trust but that is enough important. The culture that is based on b ethics helps the people to become engaged and promote the ethical behaviour that will create the trust and make the global capital markets robust. It also benefits society. The finance manager's forlorn duty is to manage and balance the interest of the stakeholders. They have to handle large sums of money which is not going to fulfil only with the skills. They do their job with honesty. Conflict is the common term in an organization but they should avoid conflicts when it comes to professional relationships. They should give accurate, and understandable information to the people so they are easily able to gather information from the finance managers. Finance and accounting is one of the critical terms in business so the finance managers should be smart enough to understand the importance of their job. They should be straight forward and disclose all the positive and negative circumstances in front of the other professionals so they can be able to get a clear picture about the financial condition of the organization. Ethics in financial management helps to guard the reputation of the employer as well as the employees. The financial managers should keep in mind that their negligence can create consequences for the organisation.

Financial performance of entities

Financial performance analysis includes the analysis of financial data. It diagnosed the data and assessed the ultimate profits and condition of finance of the business. The analysts of finance also provide some important methods of financial analysis. It also assess the production of the company besides that, it also evaluates the productivity Performance , profitability of the organisation. There are many areas for analysing the financial performance of the organisation such as the capital analysis, analysing of financial structure, analysis of the activity, and analysing the profitability. One of the most common ways to analyse financial data is to calculate the ratio of the data. The statements of finance help to compare with the other companies that depict historical Performance. The return of assets is one of the common ratios that used to determine the efficiency of the organisation. The duty of a corporate finance analyser is to conduct the finance operations internally by the department of accountants. They should share management to improve the business to make the decisions. Many companies extend credit to their customers. The corporate financial analysis involves analysing the past performance of the organisation. It also estimates the future performance of the firm. Technical analysis uses the trends of statistical trends. The analysts of technology assume that the security money reflects all information that is available publicly. It focuses on the price movements. The analysis attempts to understand the sentiment of the market. It hides behind the price trends.

The roles of corporate governance and social reporting

Corporate governance is basically the structure of rules, practices and processes that are used to direct and also control all the board of directors who are responsible for owning the governance of their companies. The stakeholders play an important role in governance. It helps to appoint the directors who are responsible for governance. Corporate governance refers to the way a corporation that is governed. It is the technique and through that the companies are directed and managed. They carry the business as per the desires of stakeholders. Corporate governance clearly depicts the relations between the managers and owners. There are many rules for effective corporate governance. The commitment stays at the top. The accountability must be established and also communicated clearly. The structure of the business is imperative and the alignment should be kept carefully. The organisation adapts and builds the sustainability program across the business units and also creates the agenda of sustainability. Corporate governance helps to balance the interests of the firm's stakeholders such as shareholders, senior management employees, customers, suppliers and the community. The theory of stakeholders evaluate the association between corporate governance and social responsibility. The corporate governance is associated positively with the corporate governance. The regression documents are significant enough to support the positive association between the corporate responsibility and corporate governance. These results should engage the managers by creating the interests. The good governance leads the organisation to keep the good CSR service. The social responsibility provides the report on an overview of the status of the organisation to solve the areas or issues in the realms of corporate responsibility based on the predefined set of metrics. The social reporting aims at measuring the beneficial effects of the activities of the enterprises. It measures all the social costs and benefits. The CSR report is a report that is periodical and published by the companies to report the corporate social responsibility actions and results. The corporate social report addresses the business model of the organisation. It also acknowledges the importance of the shareholders by clearing the role of the board in risk management in order to report sustainability and evaluate the corporate social responsibility. It also describes the diversity among the employees, and takes care of their health, safety and the relations of the employees. It also addressed the customer service and privacy. It has also addressed the standards of labour and the suppliers are required to make their own corporate programs happen. It also addresses corporate philanthropy and contributions of the charity. It has an environmental impact on the organisation. They disclose the value of the company. They also disclose the company's impact on the social systems. The internal and external mechanisms seeking the advice on ethical and lawful behaviour. The management ensures the resources are limited. The companies should identify the corporate team that will be responsible for their report of CSR. The CSR report is one of the components that can work as a stakeholder engagement. The components such as strategy, regulatory files can improve the corporate social report.

Evaluate the suitability and effectiveness of management

The organisation can measure the effectiveness and efficiency of the organisation by examining the links of the objectives to the way and achieve the plans. The strategy is effective enough to use the resources to allocate according to the plan and deliver the expected results. The strategic Perfluorocarbons measurement makes the strategic goals that are enough clear to line executives and provides a machine that is ongoing to monitor the progress of the organisation. It will help to measure the performance. The strategy cycle is measuring and evaluating Performance. The company is needed to measure the managers. The performance measurement comes in many forms. Performance measurement involves setting the Performance standard. They compare their customer satisfaction to evaluate the experience of the customers.

Demonstration of Sound judgement and logical reasoning

The effectiveness of the organisation for a business that is expressed in terms of how and what can be the profitability compares with the profitability. It also targets the profitability of the organisation. The additional measures include the growth of data and it results in customer surveys of satisfaction. The effective management means to reach the goals in an efficient manner. To monitor the effectiveness of the strategy the employees have to establish the base values. It is really important to establish the values. It is important to develop measurable strategies. It can be evaluated for overall effectiveness in management by asking to reach the goals (Li et al. 2018). The measurement of performance needs to engage both the management to understand the long term of goals. Leadership is critical in designing the effective measurement system. It is visible that involvement by senior employees and managers to become a part of measuring the performance. A framework that is conceptual is needed to measure the Performance of the management system. The effective communication with the employees, process owners are vital to successful development. It is the customers and stakeholders of an organisation. It can be private and public to judge and achieve the goals and Performances.

Effective communication

Effective communication is necessary for organization. The communication skill helps to improve the management. The employees should improve the communication. That will help to sort out the conflicts. The employers and employees should listen to each other. The way of talking matters. The employers and employees should express and explain their ideas to each other. The effective communication should be brief and specific. They should think before speaking. They should understand the need for (Williams et al.2019). They should share the information effectively. It is clearly defined that the information is effective. They should learn from each other. They should focus on the way they can share their thoughts so easily. They should understand their Audience carefully. It helps to distribute the messages clearly and in detail. It also connects with the employees. The example of good communication is understanding all the orders, conquering new skills and making the presentations. It is important to be a good listener if they want to be a good communicator. If people are not listening to each other then it is impossible to run the operations (Devi et al.2019). Active listening involves paying attention to each other. Body language such as eye contact and other body languages is definitely important when it comes to demonstrate that you are focused on them. The friendly atmosphere is needed when it comes to the atmosphere of the workplace. It is important to become confident at the workplace.


The main purpose of this report is to evaluate the relationship between the characteristics of corporate governance and report on the environment. There is an increasing tendency for the organisation in the whole world. The concept of corporate environmental responsibilities has gained considerably. They have concerns to become particularly noticeable. Corporate governance has increased heavily in recent years. The notion of sustainable development stipulates the firm. The literature suggests diverging the views regarding the organisation. The study draws a fine line between the independence on board and environmental reporting. The findings suggest monitoring the activities of the management and also ensure high levels of transparency. The environment presenting the offers becomes the opportunity for the firms to engage the stakeholders. The environment reporting should be increased by the corporations. It also gives reports about the ok organisation's economic, social and environmental operations. Environmental reporting has been described broadly by the corporations. Environmental disclosure expands the responsibility of the firms. The environmental performance is among the key challenges faced by the organisation to ensure sustainability. Stakeholders' theory has the comprehensive dimensions that compared to the theory of the agency that basically deals with the identification and appreciation of the association. The size of the board plays an important role to monitor the Performance of the management.


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