BOARD DIVERSITY, NETWORK AND FIRM VALUE

Using a large sample analysis of Thai listed firms, we address an important question. Do board diversity and network add value to firms? This article extends the debate on the benefits and costs of board diversity and network and their effect on the broader picture of corporate governance. Moreover, this article sheds light on the necessity of applying the resource dependence theory in research about boards of directors, in addition to the agency theory. We find that diversity in age and study majors are positively related to Tobin’s Q ratio, while diversity in educational levels leads to lower firm value. Our results suggest that boards with diverse age groups and study areas might generate useful advice and complement each other; however, those with diverse educational levels might create costs due to possible conflicts and a lack of coordination and communication. In addition, the results show that alumni networks have a positive effect on Tobin’s Q ratio. The findings further suggest that an alumni network is significant to firms because it could help firms obtain external resources. Overall, our research provides significant findings for policy makers to widen viewpoints about corporate governance practices and human resource development in emerging countries.