Effect Of Board Diversity On Strategic Change On Firms Listed At The Dar Es Salaam Securities Exchange

Abstract

Boards contribute consequentially towards strategic change through strategic decisions in a firm. Although numerous research have been advanced covering the effect of board diversity on strategic change, not much is known about how board diversity sways strategic change in emerging economies Tanzania being one such an economy. The main motive of this study was to determine the effect of board diversity on strategic change on firms listed at the Dar es salaam Securities Exchange. The study particularly targeted examination of the effect board diversity in terms of nationality, age and gender and their effect on strategic change for the firms listed at the DSE. The study was anchored to Stakeholder Theory, Upper Echelon Theory, Resource Dependency theory and Stewardship Theory. Descriptive research design will be applied in this research. The population that was focused on in this study constituted all publicly traded firms listed at the DSE for 19 years for the period covering 2002 to 2020. Secondary data sources were utilized in the study as obtained from the DSE and the CMSA platforms. A panel data analysis was applied in analysis of the data obtained through SPSS. The findings indicated an influence of the board‘s age diversity, education level and nationality variables on strategic change whereas gender was noted to have no impact. In overall the variables accounted for 18.9% influence on strategic change. The study recommended a further study on the other possible factors accounting for 89.1% on strategic change which could include employees‘role and industry factors. It would also be resourceful for future studies to consider non-listed firms in studies as they could be majority firms in the economy and with different governance framework as opposed to listed firms.