Diversity in Boards of Directors - Opening the “black box” : a quantitative study on how diversity characteristics will influence organizational outcome in public sector with board process as a mediator

Abstract: Globalization has brought people together from different countries with different aspects of life. Thus, the increase of globalization has brought different diversity topics in light both in era of researchers’ as well as an important political question regarding Board of Directors. However, research on diversity in the corporate world is something that exists and has been a topic of many researchers throughout the years. Nevertheless, many questions have not been entirely answered. The purpose of this dissertation is to explain how diversity in Boards of Directors mediated by board process influences organizational outcomes in public sector. We used six different diversity variables namely, age, gender, culture, tenure, education, and experience in order to see how they affect board process which in turn affects organizational outcome. A positivistic research philosophy has been used, with a deductive approach and a quantitative research, adding a pilot study to further strengthen the value of the dissertation. In addition, this study is based on assumptions stated in Non-profit governance, New Public management, Corporate Governance with Agency theory, Behavioural theory and Resource dependency. Due to the limited research on diversity in public sector with board process as a mediator in Sweden and on Swedish organizations, this dissertation attempts to fill this gap. This study is conducted on Swedish universities that are listed by the Swedish government. Several ways were used to measure our six diversity variables in Boards of Directors. Although board process is a broad term, decision-making was defined as board process in this dissertation. Furthermore, six different outcome variables were used to define organizational outcome in public sector. Our seven hypotheses were all based on earlier research from both the private and the public sector. Similarly to earlier research our results were mixed. Four of our seven hypotheses was not supported due to no significant relationship regarding decision-making and outcome whilst three of them were supported. This research may be of value for Swedish government and the public sector due to the increasing globalization.