Does Cultural diversity of Board of Directors and Audit Committee Dynamics Affect Firm Performance? Evidence from Firms in Karachi Meezan Index

Afkar Majeed , Saira Ahmed & Zeshan Ghafoor
Published Online: December 2018

In this study we have investigated that how cultural diversity of the board and audit dynamics affect firm performance. The data have been collected from Karachi Meezan index (KMI) for the period 2008 to 2016 all companies included in are Sharīʿah compliance. The board’s cultural diversity has been measured after analyzing a grand sum of 2161 board members belonging to 26 countries. The regression analysis is used to estimate the econometric model. The study reports positive and significant relationship between cultural diversity of the board and board’s independence with firm’s performance. Additionally, the study also establishes that audit fee, audit committee size and independence also have a significant relationship with firm’s performance. The study has useful implications for the mangers and investors, especially those who operate in international settings. It recommends that in future the idea should be tested in other Islamic and conventional indices as well as for different cultures.


Cultural diversity of BoD; board’s independence, audit committee’s independence, Sharīʿah compliance.