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American Journal of  Financial 
Technology and Innovation (AJFTI)

Effects of  Board Diversity on the Earning Quality of  Non-Financial Firms Listed on the 
Ghana Stock Exchange

Timothy Masuni Nagriwum1*, Wiredu Richard2, Newman Amaning3, Matthew Kuunyigr1

Volume 1 Issue 1, Year 2023
https://journals.e-palli.com/home/index.php/ajfti

Article Information ABSTRACT

Received: September 20, 2023

Accepted: October 12, 2023

Published: October 18, 2023

To maximize wealth, corporate finance must carefully balance cash flows and the cost of  
capital for a corporation, which results in corporate governance. Corporate governance 
guarantees openness, responsibility, equity, the organization’s long-term financial health, 
investor credibility, and the optimization of  investor wealth. The study aimed to determine 
how board diversity affected the profitability of  non-financial listed companies on the 
Ghana Stock Exchange with a specific focus on the effects of  gender diversity, age diversity, 
and nationality diversity on earnings quality. The study used a descriptive design and 
a quantitative research methodology. The data were examined and reviewed using SPSS 
version 23, STATA 14, and Excel. The study used secondary data that was collected for 
a period of  11 years (2011-2021) from the financial accounts of  the five (5) non-financial 
institutions that were listed on the GSE. From the perspective of  non-financial listed firms 
on the Ghana Stock Exchange, the study found that gender diversity and nationality diversity 
significantly influence earnings quality but age diversity does not have a significant impact on 
the earnings quality of  non-financial listed companies on the Ghana Stock Exchange. The 
study also recommended that management of  publicly traded companies consciously adopt 
more diverse boards, especially in terms of  gender diversity because it is associated with an 
increase in earnings quality.

Keywords
Board Diversity, Earnings 
Quality, Ghana Stock Exchange 
and Non-Financial Firms

INTRODUCTION 
According to Eka (2018), the goal of  corporate finance 
is to maximize wealth, which necessitates a careful 
balance between Cash flows and the cost of  capital 
for a company. Earnings that have not yet been paid in 
cash are categorized as normal accruals and abnormal 
accruals; higher abnormal accruals are associated with 
lower-quality earnings. Profitability influences whether a 
business can get bank financing, attract investors to fund 
its operations, and grow. According to Lazonick (2014), 
firms cannot continue to exist if  they are not turning 
a profit. To maintain the standard of  earnings and win 
the stakeholders’ trust and confidence, operational and 
non-operational income should be balanced. Quality of  
Earning, which measures the company’s actual growth 
as a result of  operational activity, is the ratio of  net 
functioning income to net income (Abbadi et al., 2016). 
Organizations place more emphasis on the quality of  their 
earnings because if  their operational revenue is strong 
enough, they can also sustain over the long term; non-
operational income is only a plus. Most businesses define 
their earning evaluation criteria in terms of  repeatable, 
controllable, and bankable (Hashim et al., 2019). 
To meet predetermined goals and maximize profits while 
also attracting investors, it is crucial for managers and 
expert analysts to maintain quality in the earnings. Strong 
corporate governance improves the firm’s standards and 
long-term performance. Corporate governance ensures 
transparency, accountability, fairness, the long-term 
financial viability of  the organization, investor confidence, 

and the maximization of  shareholder wealth. The 
performance of  a corporation is significantly impacted 
by the board’s culture and in commercial governance, the 
board of  directors is important. The board’s structure 
and membership have an impact on performance 
and the quality of  reported outcomes. Chapple and 
Humphrey (2014), the term “board diversity” is vague 
so numerous empirical studies have been done, focusing 
on various aspects of  board diversity (gender, age, board 
independence, and nationality). Busirin et al. (2015) 
indicated that an advanced number of  independent 
directors on a board will reduce the tendency of  earnings 
manipulation. One of  the demographic characteristics 
that may affect important decisions made by CEOs is 
CEO origin, such as accounting judgments that may 
affect earnings quality (Shen et al., 2021).
The corporate governance law, which was developed by 
Ghana’s Securities & Exchange Commission, increased the 
impact of  corporate governance on businesses. However, 
to overcome this agency conflict and satisfy the interests 
of  shareholders, managers should look for solutions that 
are commensurate with increasing shareholder wealth 
by raising the firm’s earning quality. This conflicting 
information tie-up has a negative impact on the financial 
statements. Although there are no specific guidelines for 
corporate governance to follow, these tools are typically 
divided into internal and external methods. Despite the 
lack of  consensus, numerous studies have identified a 
strong correlation between corporate governance and 
earnings management for constructing and maintaining 

1 School of  Finance and Economics, Jiangsu University, Jiangsu, China
2 School of  Business, Kwame Nkrumah University of  Science and Technology, Kumasi, Ghana
3 Department of  Accountancy, Sunyani Technical University, Sunyani, Ghana
* Corresponding author’s e-mail: nagriwumtm@gmail.com



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the earning quality of  organizations. To prevent investors 
from making regrettable decisions as has frequently 
happened around the world when accounting fraud has 
been used financial statements should exactly reveal 
all facts needed by users to make well-versed decisions 
on a company’s worth, the value of  its shares, and the 
precise future cash flows. By monitoring how firms are 
run while keeping in mind that managers’ interests differ 
from those of  owners, the Board of  Directors protects 
the interests of  investors.
To smooth out earnings, managers use the art of  earning 
management to convert and manipulate the outcomes. 
This leads to the development of  the idea of  corporate 
governance, which aims to improve quality by curtailing 
irregular and non-accounting business operations. Boards 
make sure that the interests of  owners and managers are 
associated. In the context of  Ghana, Adeabah et al. (2018) 
studied the effectiveness of  Ghanaian banks, corporate 
governance, and board gender diversity. In the context of  
Ghanaian listed firms, Kukah et al. (2016) concentrated 
on corporate governance practices and accounting 
information quality. The focus of  Boadi and Osarfo’s 
(2019) study was on Diversity and Return: The Effects of  
Board Members’ Education Diversity on Performance. 
Some research has been conducted to determine how 
board diversity and earnings management affect each 
other but this study was set out to fill a knowledge gap 
caused by the fact that previous research on the subject 
has not been conclusive, particularly in the case of  
developing countries like Ghana with Gross Domestic 
Product, firm size, firm sector and inflation as control 
variables from the viewpoint of  listed non-financial firms 
on the Stock Exchange. The prime goal of  this study was 
to investigate the connection between board diversity on 
the earnings quality of  non-financial companies quoted 
on the Ghana Stock Exchange by narrowing board 
diversity to; gender diversity, age diversity, and nationality. 

LITERATURE REVIEW 
Conceptual Review 
Earning Quality (EQ) Concept 
There is no established definition of  earnings quality (EQ) 
or method for determining it in literature (Abdelghany, 
2005; Schipper & Vincent, 2003). Managers, accountants, 
auditors, and policymakers are all concerned with EQ since 
capital markets depend on accurate and reliable financial 
information. Regarding this, Teets (2002) claimed that 
“higher quality earnings provide more information about 
the features of  a firm’s financial performance that are 
relevant to a specific decision made by a specific decision-
maker”. With this description, “quality” depends on a 
particular decision context and is determined subjectively 
(Dechow, Ge, & Schrand, 2010). 
To extract information from earnings patterns that are 
significant to value, investors, for instance, employ EQ 
“as a conditioning variable” (Francis, LaFond, Olsson, & 
Schipper, 2003). Even when reported earnings and the 
associated revelation comply with Generally Accepted 

Accounting Principles, false reporting is referred to in 
the financial press as an “earnings quality” issue. The 
press may not agree with standard setters, policymakers, 
and auditors on this matter because, in their opinion, 
earnings are of  extraordinary quality if  they adhere to 
the spirit and regulations outlined in GAAPs and IFRSs. 
Conversely, when earnings are readily convertible into 
cash flows, creditors are more inclined to consider those 
earnings as being of  good quality. Otherwise, when 
compensation reflects managers’ actual performance 
and is mostly unaffected by circumstances outside of  
management control, compensation committees are 
likely to consider profits as being of  high quality. These 
instances demonstrate how the concept of  EQ is driven 
by the decision-objective makers and the function that 
earnings play in the resolution model.
EQ study was reviewed in depth and detail by Dechow 
and Schrand (2010), who also offered other insightful 
observations that when earnings give decision-
makers additional details about a company’s financial 
performance, they are seen as being of  higher quality. 
According to the authors’ analysis of  EQ from the 
perspective of  financial analysis, earnings are of  high 
quality if  they “precisely annuitize the inherent value of  
the firm.” They distinguish this value quality by reporting 
an earnings number that is normalized, productive, or 
representative and equates to long-term earnings. They 
said that earnings have three qualities that make them 
of  excellent quality: they provide a helpful summary 
for estimating business worth; they accurately reflect 
actual performance; and they predict future success. EQ 
is the term used to describe the capacity of  reported 
profits to properly represent the underlying earnings 
of  the company as well as their efficacy in projecting 
future earnings. The relationship between the most basic 
indicators of  a company’s performance, namely cash 
flows, and earnings, can be used to gauge emotional 
intelligence (EQ). EQ is related to the process by which 
a company converts its cash flows into reported earnings.
 
Board Diversity Concept  
Board diversity is one of  the most significant governance 
challenges in recent years (Barako & Brown, 2008). 
However as the workforce became more diverse in 
respect of  gender, race, and age, the need for a more 
diverse board became more essential (Darmadi, 2011). 
An organization benefits from having a diverse board 
of  directors because it increases corporate leadership 
effectiveness, fosters market understanding, legitimizes 
businesses, forges international linkages, and improves 
corporate administration (Van der Walt & Ingley, 2003 
and Erhardt et al., 2003). According to the agency idea, the 
more varied a board is, the more independent it will be, 
which will result in better management oversight (Carter 
et al., 2007). Diversity is described as the state of  including 
or consisting of  various elements, of  diversity (Cabrera-
Suárez et al, 2017). A collection of  diverse individuals in 
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to as a group that has undergone diversification (Ararat 
et al., 2010).
Board diversity hence refers to the diversity of  the 
board. When discussing board diversity, people usually 
consider gender diversity; however, true diversity also 
includes things like cultures, races, educational levels, 
ethnicity, nationality, and more. Numerous international 
organizations have made efforts to diversify their boards 
of  directors and administration and Ghana is not an 
exception since Ghana is a nation with several different 
ethnic groups.
The resource dependence theory, on the other hand, 
contends that board variety will boost the funds given 
by members, including expertise, knowledge, legitimacy, 
and access to important stakeholders (such as vendors, 
customers, federal policy decision-makers, and social 
groupings) (Hillman et al., 2000). As a result, the board 
of  directors diversity in relation to age, gender, and 
race would be able to offer the management special 
knowledge for improved decision-making (Ayuso & 
Argandoa, 2007). These may affect a company’s earning 
potential. While gender diversity, as per Perryman et al. 
(2016), aids in enhancing the stock charge in information 
by encouraging the collection of  private data in small 
businesses and increasing public disclosure in large 
corporations.

Gender Diversity
Gender variety is the term used to describe situations in 
which a person’s gender identity, role, or manifestation 
differs from the expectations placed on members of  a 
particular sex in society. This expression is being used 
to refer to people more frequently. Gender identities are 
said to exhibit gender diversity when they display a range 
of  expressions outside of  the binary framework. Many 
gender-diverse people find the concept of  binary gender, 
which forces you to decide whether to manifest yourself  
as male or female, to be limiting. Some people would want 
to have the freedom to alter their gender or not identify 
at all. Others merely want the ability to publicly disagree 
with or reject more prevalent gender stereotypes. Gender 
diversity has been incorporated into the larger idea of  
board diversity (Carter et al., 2003). Carter et al., (2003), 
allude to the fact that there are female directors on the 
board of  directors of  the corporation. Women directors 
provide a variety of  viewpoints, experiences, and working 
methods to the board which improves decision-making 
and the board’s debate.

Age Diversity
The acceptance of  people of  different ages in a 
professional context is referred to as age diversity. 
Businesses can take action to combat ageism at work 
and address the aging population. Age can be viewed 
as a board asset and is part of  human capital, per 
Sonnenfeld (2002) and Darmadi (2011), because it can 
replicate experience and risk-taking. However, in the 
business world of  today, youthful directors are constantly 

involved, while the majority of  board members are older 
(Benjamin et al, 2018).Young directors could provide 
the organization with fresh insights and ideas. There is 
a claim that youthful directors are more imaginative and 
have a greater capacity to process fresh ideas (Van Ness 
et al, 2010). Additionally, they have a better relationship 
with strategic change and are more eager to take part 
in the control process (Darmadi, 2011). The board’s 
effectiveness and decision-making may be improved as 
a result.

Nationality Diversity
Several governance principles promote the appointment 
of  members of  various nationalities to the board of  
directors to reflect the national variety of  its stakeholders, 
employees, and consumers (Fidanoski et al, 2014). 
Additionally, it is believed that adding foreign directors to 
the board can enhance the quality of  the decision-making 
process (Van den et al, 2005). According to resource 
dependence theory, foreign directors can offer a variety 
of  viewpoints, have distinct cultures and behaviors, as 
well as varied life experiences, all of  which may be able 
to advance decision-making and the business’s plans 
(Ruigrok et al, 2007; Ayuso & Argandona, 2007). It was 
suggested that hiring foreign directors would help the 
team make better decisions since they would provide a 
variety of  viewpoints and opinions about the country 
or region’s culture, language, life experiences, religion, 
and social customs (Ruigrok et al., 2007). According to 
Ayuso and Argandona (2007), the knowledge of  foreign 
directors enhances corporate strategy decisions, for 
instance, by supporting CSR reporting techniques, while 
also increasing board capital (which eventually may lead 
to improved financial performance).

Theoretical Review 
Identifying current theories, their connections, the 
depth of  their research, and the creation of  new testable 
hypotheses are all aided by a theoretical literature 
review. Many corporate governance ideas incorporate 
stewardship theory and agency theory.

Agency Theory
In 1952, Jensen and Meckling created the agency 
hypothesis. According to Jensen and Meckling (1976), 
an agency relationship is defined as the parameters of  
an agreement whereby the principal appoints a distinct 
agent to carry out tasks like exercising decision-making 
authority on his behalf. Regarding the agency theory, the 
degree of  firm complexity and the possibility of  agency 
benefits have an impact on managers’ capacity to alter 
data and manipulate earnings, both of  which may be 
crucial. A large company with complex organizational 
structures and agency issues is deemed to be more varied 
than an industry or a nation (Padilla, 2000).
According to Jensen and Murphy (1990), managers are 
also urged to call for diversification to increase their 
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their post within the company by managing particular 
investments to reduce the risks associated with both their 
personal investments and the organization’s investments. 
One of  the motivations for managers to limit costs is 
agency cost. Per agency theory, controlling earnings is 
prioritized in the management of  figures so that they 
can profit from the contracting procedure, according 
to actual data. Numerous studies have documented the 
existence of  information asymmetry between investors 
and directors, which is a prerequisite for effective earnings 
management (Yu, 2008). As a result of  the shareholders 
receiving less information, the internal management may 
have used its point to manage and influence the reported 
earnings (Amihud et al, 2006).
Given that boards of  directors represent shareholders while 
managing the operations of  the company, agency theory 
is extremely pertinent to the current research on the link 
between board diversity and earnings management. Agency 
issues may arise if  the directors act in their self-interest, 
for as by falsifying financial records to present a positive 
performance picture, particularly if  their compensation is 
contingent on the success of  the company.

Stewardship Theory
According to Barbuto & Wheeler, the stakeholder 
theory merged the fields of  sociology and organizational 
studies (2006). According to the stakeholder theory, 
the institution’s goals might be affected or impacted 
by a group of  people. The systems of  connections 
that administrators must manage include those with 
employees, traders, and business partners. Additionally, it 
is asserted in this theory that the set of  systems is more 
significant than the relationship between the employer 
and employees as described in the agency theory. 
The incentive mechanisms in share options provide 
the managers with a way to justify their exceptional 
overpaying. Keasle et al (1997). Since executive 
compensation has grown significantly quicker than the 
average wage and there is a poor correlation between 
managerial performance and pay, executive power is 
being misused. This is especially related to the issue of  
overpay (Conyon et al, 1995; Brennan et al, 2008). The 
development of  independent remuneration committees, 
as is the case in large businesses, is ineffectual, and the 
humility of  the managers is the only important factor that 
can limit executive pay (Owen, N., 2018)
The analysis of  how board diversity affects the 
management of  profitability in publicly traded 
manufacturing organizations can be done using the 
stakeholder theory. The study outlines the many parties 
that aside from owners whose control might affect 
a firm’s survival, have a stake in the administration of  
manufacturing enterprises. The proponents of  this model 
argue that the most effective control mechanisms are the 
main lines of  modifications in corporate governance, 
such as non-executive directors, shareholder participation 
in important decision-making, and complete disclosure 
of  company affairs (Kay and Silberston, 1995).

Empirical Review 
Gender Diversity and Earnings Quality
The study by Ain et al (2021) uses a sizable sample spanning 
the years 2003–2017 to evaluate the connotation between 
gender diversity on the board and dividend payouts in 
China. Our findings offer solid and convincing proof  
that gender diversity on the board is favorably linked to 
dividend payments made in cash. The empirical results 
back the idea that gender diversity on the board improves 
corporate governance, which in turn encourages dividend 
payments. They demonstrate that the benefit of  gender 
diversity on the board is greatest when there is a critical 
mass of  engagement (three or more female directors), as 
opposed to just nominal engagement. Female independent 
directors have a considerable impact on dividend payouts, 
but female executive directors do not. We also add to 
the body of  knowledge on the relationship between 
dividend payments and public control by providing data 
demonstrating that gender diversity has a bigger impact 
on dividend payouts for state-owned businesses than for 
non-state-owned enterprises.
Our results are trustworthy and solid after the endogeneity 
issues are taken into account. Using data analysis of  152 
businesses quoted on the Tehran Stock Exchange between 
2011 and 2016, Kazemi and Abdi’s (2019) study intended 
to evaluate the effects of  gender diversity (at least one 
female delegate on the board of  directors and in the audit 
committee) on profit quality. The archive-based method 
was used to collect the data, and regression analysis with 
the imbalanced panel data method was used to evaluate 
the hypotheses.
The findings showed that having women on audit 
committees had a big impact on the quality of  earnings. 
Also, the results showed that gender variety on the board 
of  directors does not significantly affect the quality of  the 
company’s earnings. When women are well-represented 
among senior business executives, financial reporting 
and managerial control are of  higher quality. The audit 
committee and board of  directors are consequently more 
impartial, which raises the standard of  earnings. The 
results show that having female directors with significant 
financial experience improves earnings quality more than 
doing without them. Additionally, our findings show that 
the only female directors who can minimize earnings 
management are those who have relevant financial 
expertise and fewer outside directorships. The study 
found no indication that female directors without the 
necessary financial skills may mitigate profit management, 
irrespective of  their external directorships or duration.
The study by Dimitrova (2017) examines the impact of  
social connections between CEOs and board members 
as well as the gender of  these CEOs on the standard of  
earnings as determined by earnings administration. The 
scrutiny of  financial reporting has intensified in recent 
years as a result of  several accounting scandals, which 
have also brought to light the value of  sound corporate 
governance. The board should be independent and diverse 
to lessen agency conflicts. Although previous research 



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has not shown definitive results, social bonds may reduce 
independence. According to Dimitrova (2017), connected 
CEOs and profit quality should be negatively correlated. 
In a professional setting, gender diversity is a subject that 
is frequently explored. Women are generally thought to 
be more ethical at work, which implies that they take 
part in less earnings administration and hence produce 
higher-quality earnings. The hypothesis is tested using a 
sample of  99 UK-listed companies with 198 observations 
spanning two years (2015 and 2016).

Age Diversity and Earnings Quality
Hoang et al. (2017), in a survey of  Vietnamese public 
companies, the study looked at how board diversity affected 
the quality of  the earnings. A wide range of  structural and 
demographic aspects of  a board of  directors are covered 
by the two dimensions of  board diversity measures 
used in this study, which include a diversity-of-boards 
index (dissimilarities among company boards, i.e., board 
structure) and a diversity-in-boards index (dissimilarities 
among directors within a board, i.e., demographic 
features of  board members). Four accounting-based 
factors accruals quality, earnings consistency, earnings 
predictability, and accruals smoothness combine to 
provide the overall indication of  profits quality. They find 
a non-linear, U-shaped link between the two variables, but 
a strong, significant linear association between the diversity 
of  boards and earnings quality.
Almomania et al (2020), study looks at how board diversity 
and profits quality relate to a sample of  Amman Stock 
Exchange-quoted companies (ASE). There were 68 firms 
in the sample from 2010 to 2019, totaling 680 firm-year 
observations. The yearly reports of  companies registered 
on the ASE were used to gather secondary data. The 
discretionary accruals (DA) model developed by Kothari 
in 2005 was used to gauge the quality of  earnings. Board 
gender, board experience, board age, and board religion 
were used to measure board diversity.
Board age, experience, and gender all have a big impact 
on earnings quality, but board religion does not. This 
shows that a key explanation for the quality of  earnings 
is provided by corporate governance. This study shows 
how a diverse board can improve the earnings quality of  
companies quoted on the ASE. Additionally, this research 
reveals that the board of  directors has a crucial role in 
promoting corporate governance. A more diversified board 
of  directors should be encouraged and should also ensure 
that listed companies’ corporate governance is effective.

Nationality Diversity and Earnings Quality
Hashim et al. (2019), the study aimed to investigate the 
connection between board diversity and the quality of  
earnings in the companies listed on Bursa Malaysia Main 
Market. Malaysia has a multi-ethnic population with 
many distinct beliefs, which may have a good impact on 
the standard of  earnings. In order to improve the firms’ 
profits quality, the study also looks at whether internal 
audit functions are carried out internally or externally. It is 

discovered that ethnic and national diversity significantly 
affects the sampled companies’ earning quality. Age and 
gender diversity, however, do not seem to have a major 
consequence on the quality of  wages. The quality of  the 
companies’ earnings will be able to rise with the inclusion 
of  more representatives of  various races on the board.
By examining listed corporations in Pakistan, Khan and 
Abdul Subhan (2019) look into how board diversity and 
high-quality auditing affect financial performance. The 
diversity of  the board is examined in terms of  gender 
and nationality. Even though many firms desire a diverse 
board composition, it is unclear how this will affect 
business performance. This study showed an intriguing 
correlation between board diversity and firm financial 
performance. Higher audit expenses lead to more efficient 
audit services when compared to organizations with lower 
audit prices. Sector representation and the largest market 
capitalization are taken into consideration while choosing 
the PSE-100 index. A panel data collection with a time 
range of  2008 to 2017 is gathered. In its methodology, 
the study used panel data and quantitative econometric 
methodologies to close the research gap in the body of  
existing governance literature.
According to research, nationality diversity is inversely 
correlated with corporate financial performance, primarily 
as a result of  communication hurdles and varying cross-
cultural perspectives. Due to extended audit hours and 
skilled audit employees conducting a more thorough 
inquiry, which costs more in audit fees, high audit cost 
implies a good quality audit. Kouaib and Almulhim 
(2019), examined the question of  whether an audit index 
controls the association between boardroom diversity 
in terms of  gender and foreign directors and earnings-
management practices in the European environment. A 
moderation model was tested using information from 
a sample of  429 European companies featured on the 
Stoxx Europe 600 Index between 1998 and 2017.
Evidence shows that non-European directors are linked 
with earnings-management activities, while accruals-based 
and real earnings-management activities are inversely 
associated with board gender diversity. The relationship 
between board diversity and earnings management is 
further dramatically moderated by the audit index. This 
study is distinctive in that it offers European proof  of  
the controlling role of  audit quality in the relationship 
between board member demographics and business 
performance. Haruna et al. (2018), investigated how 
board characteristics affect the profitability of  Nigerian 
conglomerate enterprises. The secondary source of  
data gathering was the audited accounts of  Nigerian 
conglomerate corporations, the gathered data was 
examined using two steps of  regression. The outcome 
showed that the board characteristics proxies significantly 
influence the earnings quality of  Nigerian conglomerate 
enterprises. This proves that board qualities are important 
in restricting managers’ unethical behavior in Nigerian 
conglomerate enterprises and enhancing the quality of  
earnings.



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Conceptual Framework 
A conceptual framework incorporates one or more formal 
theories, additional concepts, and actual evidence from the 
literature, either entirely or in portion (Horn and Brem, 
2013). It is used to show how these ideas are related to one 
another and how they relate to the research issue.
As shown in Figure 1, gender diversity, age diversity, and 

nationality diversity are used as the independent variables 
which are components of  board diversity, the dependent 
variable is earnings quality. Ali et al. (2015) asserted that 
the firm size and its sector of  operation influence the 
earnings quality of  an organization. Therefore the study 
used firm size, firm sector, inflation, and Gross Domestic 
Product as control variables.

Figure 1: Conceptual Framework
Source: Author’s Construction (2022)

METHODOLOGY
The approach used in this investigation is demonstrated 
in this section. The study used a descriptive design in its 
methodology. Descriptive design studies are concerned 
with the description of  characteristics of  individuals or 
groups (Lenz et al., 2016). Descriptive research helps 
researchers to accurately evaluate the background 
of  a research problem before doing a more in-depth 
examination by clearly and specifically identifying the 
independent and dependent variables being studied. 

As of  December 31, 2020, there were 25 non-financial 
firms registered on the Ghana Stock Exchange. From 
2011 to 2021, five (5) non-financial firms registered on 
the Ghana Stock Exchange were specifically chosen using 
the purposive sample method with eleven-year period 
of  information span. The sampled firms are Guinness 
Ghana Breweries PLC, Fan Milk Limited, GOIL PLC, 
Golden Star Resources Ltd, and Unilever Ghana PLC. 
Firms that were not listed between 2011 and 2021, 
firms without financial statements for the study period, 

Table 1: Measurement of Variables
S/N Description Measurement Source Prediction
Dependent Variable
1 Earnings Quality Dividing total earnings or total net income by 

the total number of outstanding shares.
Dechow et al. (2010)

Independent Variables
2 Gender Diversity The ratio of female directors to the total 

number of directors
  Owen (2018) +

3 Age Diversity The percentage of young to the total number 
of directors of the company

  Owen (2018) -

4 Nationality Foreign directors to the total number of 
directors on the board

  Owen (2018) +

Control Variables
5 GDP The sum of what is purchased in the economy  GSS (2020) +
6 Firm Size Log of total Assets of the firm  Owen (2018) +
7 Firm Sector Firm sector operating Darmadi       (2011) +
8 Inflation The rate of change of those prices  GSS (2020) +

Source: Author’s Construction



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and firms with published audited accounts that did not 
show the corporate governance system by disclosing 
board diversity information were not included in the 
study sample, hence this methodology was appropriate. 
Information for the study was based on secondary 
data, particularly the financial statements of  the five 
(5) selected registered non-financial companies on the 
GSE from 2011 to 2021.Additionally, academic journals, 
scholarly papers, pertinent textbooks, and web search 
engines were utilized. Dependent variables, independent 
variables, and control variables were appropriately 
measured. The elements which include gender diversity, 
age diversity, nationality diversity, earnings quality, firm 
size, firm sector, inflation, and Gross Domestic Product 
were considered as the variables in the study.
Excel and STATA 14 are employed to evaluate the data that 
was gathered. Regression analysis is used in the research 
to determine the relationship between the variables being 
examined. The research used linear regression data analysis 
methods to analyze the collected data, both descriptive 
and correlation. In the data analysis, cross-sectional and 
time series data were integrated. Descriptive statistics are 
used to quantify the main performance variables using 
Mean, Maximum, Minimum, and Standard Deviations. 
As part of  the validity and reliability assessments, the 
study also performed diagnostic tests: multicollinearity 
and heteroscedastic.

Model Specifications
The paper adopted a regression model to institute 
the connection between the variables in the study 
as recommended by Hair, et al. (2006). The model 

specification was presented as:
EQ= β0 + β1 Size + β2 FS + β3 INF + β4 GDP +β5GD 
+ ε……Model 1
EQ= β0 + β1 Size + β2 FS + β3 INF + β4 GDP+β6 AG 
+ ε……Model 2
EQ= β0 + β1 Size + β2 FS + β3 INF + β4 GDP+ β7 
NA + ε……Model 
EQ = Earnings Quality
Size = Firm size
FS = Firm Sector
INF = Inflation 
GDP = Gross Domestic Product
GD = Gender Diversity
AG = Age Diversity
NA = Nationality 
α = The intercept
β = Coefficient of  independence variables
ε = Error term within a confidence interval of  5%

RESULTS AND DISCUSSIONS
Descriptive Statistics
Table 2 shows the descriptive statistics of  the variables 
used in the study. The variables include earnings quality 
(EQ), gender diversity (GD), age diversity (AD), nationality 
diversity (NA), firm size (Size), firm sector (SEC), inflation 
(IFL), and Gross Domestic Product (GDP).
As shown in Table 2, in the case of  Earnings Quality 
(EQ), the maximum amount recorded within the year is 
0.930, and the minimum value is -0.750. The mean for the 
period is 0.20 also recording a standard deviation of  0.30. 
This means on average there is an increase of  0.20 in the 
earnings quality from 2011 to 2021. 

Table 2: Summary of Descriptive Statistics
Variable Obs. Mean Std. Dev. Min Max
Earnings Quality 55 0.20 0.30 -0.750 0.930
Gender Diversity 55 0.23 0.12 0.090 0.500
Age Diversity 55 0.23 0.23 0.039 0.900
Nationality 55 0.46 0.26 0.000 0.780
Firm Size 55 9.02 3.42 3.494 18.000
Firm Sector 55 1.40 0.49 1.000 2.000
Inflation 55 11.71 3.45 7.140 17.450
GDP 55 5.97 3.66 0.510 14.050

Ghana Stock Exchange (2021)

It was also revealed that the mean value for gender 
diversity was 0.23 with a standard deviation of  0.12, the 
smallest rate recorded was 0.090 and the maximum value 
of  0.500 was recorded. This result implies that there is 
less gender diversity on the boards of  the firms sampled. 
This indicates that men and women are not engaged at a 
balanced rate.
The maximum rate for age diversity was 0.900 and a 
minimum of  0.039. The standard deviation rate was 
0.23 and the mean of  0.23. This result implies that age 
diversity is crucial for a welcoming environment which is 

challenged since a low mean value was recorded. 
In respect of  the board member nationality, the mean 
value of  0.46 and standard deviation of  0.26 are recorded. 
The minimum value recorded was 0.000 and a maximum 
value of  0.780 was also recorded. With a minimum value 
of  0.000, this means some of  the board does not include 
foreign members, and also with a standard deviation of  
0.26, most of  the board have foreigners as board members. 
With respect to the firm size, it was established that the 
average size is 9.02 and a standard deviation of  3.42, the 
maximum size recorded was 18.000 and the minimum 



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value is 3.494. Recording a mean of  9.02 implies that 
on average over the period of  eleven years from 2011 
to 2021, the firm increased by 9.02 in size. The firms 
were categorized as manufacturing or non-manufacturing 
which was labeled as a firm sector, the average rate 
recorded was 1.40 with a standard deviation of  0.49, a 
least value of  1.000, and a supreme value of  2.000. This 
implies both manufacturing and non-manufacturing are 
involved in the study. With respect to inflation the mean 
value of  11.71 and the standard deviation of  3.45. The 
minimum value recorded was 7.140 and the maximum 
value of  17.450. This implies the highest inflation recorded 
within the period of  the study was 17.450 and the lowest 
was 7.140 and on average, the rate of  increase in the rate 
was 11.71.With respect to Gross Domestic Product, the 
minimum rate for the period was 0.510 and the maximum 
14.05, with a mean of  5.97 and a standard deviation of  
3.66. This implies the highest GDP rate recorded within 
the period of  the study was 14.05 and the lowest was 0.510 
and on average, the rate of  increase in the rate was 5.97.

Augmented Dickey-Fuller (ADF) Test
The first difference is that all five series appear stationary, 
and correlograms confirm this by showing that ACFs tend 
to zero rather quickly. After taking the first difference, 
the study uses the unit root test with Augmented Dickey-
Fuller to determine whether the series is now stationary 
or not, and the results are shown in Table 3.
According to Cheung and Lai (1995), when the P-value 
is greater than 0.05, the null hypothesis (H0) is not 
excluded, the data has a unit root, and it is non-stationary; 
when the P-value is less than 0.05, the null hypothesis 
(H0) is excluded, the figures do not have a unit root, and 
it is stationary; and when the P-value is less than 0.05, the 
figures does not have a unit root, and it is stationary.
The results of  the Augmented Dickey-Fuller test in Table 
3 indicated that there is a unit root based on the P-values 
of  all five series, as the P-values are insignificant. The 
calculated ADF test-statistic values of  the five sequences 
are less than the critical values at the 1%, 5%, and 10% 
levels of  importance, with dissimilar lag lengths (based 

Table 3: Augmented Dickey-Fuller (ADF) Test
Results EQ GD AD NA Size SEC IFL GDP
Test Critical Values 1% level -2.559 -3.750 -3.750 -3.750 -3.000 -3.000 -3.000 -3.000

5% level -3.750 -3.000 -3.000 -3.000 -2.400 -2.400 -2.400 -2.400
10% level -3.000 -2.630 -2.630 -2.630 -2.104 -2.104 -2.104 -2.104

T-Statistic -2.559 -2.345 -4.563 -1.219 -1.876 -3.650 -1.105 -0.975
Lag Length 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
Prob 0.102 0.158 0.522 0.665 0.126 0.418 0.474 0.532

Note: Earnings Quality (EQ), Gender Diversity (GD), Age Diversity (AD), Nationality Diversity (NA), Firm Size (Size), Firm 
Sector (SEC), Inflation (IFL), and Gross Domestic Product (GDP).
Source: Author’s Estimation.

on Schwarz Information Criterion). As a result, we reject 
the null hypothesis that all three sequences have a unit 
root. According to the Augmented Dickey-Fuller results, 
we concluded that all five series are stationary.

Test of  Heteroscedasticity
There are several methods of  detecting Heteroscedasticity 
in regression models. However, the present study resorted 
to using the Breusch-Pagan Godfrey Heteroscedasticity 
Test due to its robustness and wide acceptance. 
If  the probability of  the F-statistics of  the test show 
significance that implies that there is a presence 
of  Heteroscedasticity. As shown in Table 4, the 
models showed significance which suggests that 
Heteroscedasticity was not a problem in the study.

Correlation Matrix
Table 5 displays the correlation matrix. In a correlation study, 
the correlation value should not exceed 0.8 for that variable. 
Values greater than 0.8 indicate a multicollinearity problem.
As shown in Table 5 none of  the variables recorded a 
multicollinearity problem since all the correction values 

Table 4: Breusch-Pagan / Cook-Weisberg test for 
Heteroscedasticity
Ho Constant Variance
Variables Fitted Values Of EQ
chi2 (1)     0.09
Prob > chi2 0.762

Source: Author’s Estimation.

Table 5: Correlation Matrix
IFL GDP Size GD AD NA SEC EQ

IFL 1
GDP -.472** 1

0.000
Size 0.054 -0.126 1

0.696 0.358



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are below 0.8. The results showed a mean of  0.82 and a 
standard deviation of  0.12. The minimum and greatest 
values that were noted were 0.560 and 0.940, respectively. 
As a result, the majority of  the board members are not now 
working for the company or its auditor, and neither does 
their employer do a lot of  business with the organization.
It was revealed that EQ correlates with Size (p=0.000, 
r=-0.467), and SEC (p=0.033, r=-0.288). SEC is also 
found to correlate with Size (p=0.000, r= 0.587), GD 
(p=0.000, r= -0.516), AD (p=0.002, r= -0. 413) and NA 
(p=0.000, r= -0.495). Also, NA is found to correlate with 
GD (p=0.015, r=0.326).

Multiple Regression Analysis
A model that establishes the relationship between the 
control, independent, and dependent variables is multiple 
regression analysis. This analysis’s goal is to predict how 
the sampled secondary data will turn out. The goal of  this 
analysis is to develop models of  the relationship between 
the collected explanatory and secondary data.
 
Gender Diversity and Earnings Quality
The first regression was to analyze the relationship flanked 

by gender diversity and earnings quality as indicated in 
model 1 of  this study. The result is presented in Table 4.5.
The investigation starts with a review of  the model 
summary. This model describes the regression line’s 
capacity to fully explain the difference in the dependent 
variable. The R square is the second piece of  information 
discovered by the researcher. The value of  R square is 
0.2903, which equals 29.03 percent. This means that the 
independent variable which is Gender Diversity and the 
control variables (firm size, firm sector, inflation, and 
GDP) explain 29.03 percent of  the total variance.
Table 6 also summarizes the study model’s overall fit. 
The number of  observations (55) simply refers to the 
number of  observations used in the regression. F (5, 49) 
represents the F-statistics of  the model-based ANOVA 
test. The F-statistic analyzes whether there is a statistically 
momentous difference between the ratios explainable to 
inexplicable mean-variance.
Simply, the models and residual degrees of  liberty are 
represented by the numbers 5 and 49, correspondingly. 
To find out how effectively the indicators (as a whole) 
predict the dependent variable, Stata does a hypothesis 
test. According to the null hypothesis, the mean-variance 

Table 6: Gender Diversity and Earnings Quality
Source SS df       MS Number of obs 55

F(  5,    49) 4.01
Model 1.40 5 .28018 Prob > F 0.004
Residual 3.42 49 .0699 R-squared 0.2903

Adj R-squared 0.2179
Total 4.83 54 .089363405 Root MSE 0.26437
Earnings Quality Coef. Std. Err. t P>|t| [95% Conf. Interval]
Firm size -0.034 01637 -2.05 0.045 -0.07 0.00
Firm sector -0.009 .09107 -0.10 0.922 -0.19 0.17
Inflation -0.001 .011817 -0.06 0.954 -0.02 0.02
GDP -0.019 .01137 -1.65 0.106 -0.04 0.00
Gender Diversity -0.034 .03278 -1.04 0.302 -0.10 0.03
_cons 0.734 .2175 3.37 0.001 0.30 1.17

Source: Author’s Estimation.

GD -0.203 0.026 -.434** 1
0.136 0.849 0.001

AD -0.057 -0.053 0.094 .331* 1
0.677 0.702 0.494 0.014

NA -0.012 -0.003 -0.134 .326* 0.022 1
0.930 0.985 0.330 0.015 0.876

SEC 0.000 0.000 .587** -.516** -.413** -.495** 1
1.000 1.000 0.000 0.000 0.002 0.000

EQ 0.079 -0.176 -.467** .390** -0.030 -0.016 -.288* 1
0.566 0.199 0.000 0.003 0.826 0.909 0.033

Note: Earnings Quality (EQ), Gender Diversity (GD), Age Diversity (AD), Nationality Diversity (NA), Firm Size (Size), Firm 
Sector (SEC),  Inflation (IFL), and Gross Domestic Product (GDP).
Source: Author’s Estimation.



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that can be understood easily is related to the average 
variance that cannot be explained. The mean summation 
of  the squares of  the model is approximately four times 
larger than that of  the residual.
The possibility of  attaining the predicted F-statistics or 
greater is indicated by the Prob > F. (the p-value). The 
transitional that the MS of  the model is considerably 
bigger than the residual must be accepted if  the study’s 
p-value is less than 0.05 for a standard alpha level of  0.05. 
As an outcome, our model’s predictors precisely predicted 
the aim of  the variable.
In the case of  the control variables Firm Size, Firm 
Sector, Inflation, and Gross Domestic Product recorded 
p-values of  0.00, 0.17, 0.02, and 0.00 respectively. This 

implies that three control variables (Firm Size, Inflation, 
and Gross Domestic Product) influence the dependent 
variable which is Earnings Quality when the independent 
variable is Gender Diversity.
Also, the independent variable Gender Diversity recorded 
a p-value of  0.03. The study results imply that Gender 
Diversity has a significant influence on Earnings Quality 
among the listed firms.

Age Diversity and Earnings Quality 
The regression analysis for the relationship between the 
control variable, age diversity as an independent variable, 
and earnings quality is examined and the results are 
presented in Table 7.

Table 7: Age Diversity and Earnings Quality
Source SS df       MS Number of obs 55

F(  5,    49) 3.71
Model 1.33 5 .2650 Prob > F 0.006
Residual 3.50 49 .0714 R-squared 0.275

Adj R-squared 0.201
Total 4.83 54 .0893 Root MSE 0.267
Earnings Quality Coef. Std. Err. t P>|t| [95% Conf. Interval]
Firm size -0.044 .0149 -2.96 0.005 -0.074
Firm sector 0.008 .1122 0.07 0.944 -0.218 0.233
Inflation -0.001 .0120 -0.06 0.955 -0.025 0.023
GDP -0.020 .0114 -1.74 0.088 -0.043 0.003
Age Diversity 0.012 .1946 0.06 0.95 -0.379 0.403
_cons 0.707 .2378 2.98 0.005 0.230 1.185

Source: Author’s Estimation.

In the case of  model 2, age diversity is used as the 
independent variable while earnings quality was used as 
a dependent variable with control variables of  firm size, 
firm sector, inflation, and GDP. As shown in Table 7, 
an r-square of  0.275 was recorded this means the age 
diversity with the control variables explains 27.50% of  
the dependent variable. 
The possibility of  attaining the predicted F-statistics or 
greater is indicated by the Prob > F. (the p-value). If  
the inquiry provides results that support the alternative 
hypothesis that the model’s MS is significantly greater than 
the lingering effects of  the null hypothesis, it is shown 
by a p-value less than 0.05 for a standard alpha level of  
0.05, as illustrated in Table 7. As a result, the predictors in 
our model successfully forecast the desired variable. With 
respect to model 2, the control variables which include 
firm size, firm sector, inflation, and gross domestic 
product recorded p-values of  0.005, 0.944, 0.955, and 
0.088 respectively. This implies of  one the control 
variables which is firm size influences the dependent 
variable which is Earnings Quality as the independent 
variable. Also, the independent variable Age Diversity 
recorded a p-value of  0.06. The study outcomes imply 

that Age Diversity has little or unimportant influence on 
earnings quality among the listed firms.

Nationality and Earnings Quality
This section presents the multiple regression analysis for 
model 4, where Nationality is used as the independent 
variable. The analysis includes the dependent variable and 
the control variables and the result is presented in Table 9.
As shown in Table 9, the Prob > F value recorded was 
0.005 which implies that the model significantly predicts 
accurately the target variable. Since the p-value is below 
0.05. Model 4 is found to explain the dependent variable 
by 28.40% since the R-squared value recorded was 0.284. 
Among the control firm size was the only control 
variable found to significantly influence earning quality 
since a p-value of  0.004 was recorded. In the case of  the 
other control variables, firm sector, inflation, and GDP 
the p-values chronicled were 0.712, 0.939, and 0.088 
respectively which are above the theoretical level of  0.05. 
The dependent variable which is Nationality recorded 
a p-value of  0.022 which means that Nationality has a 
significant impact on the earning quality of  a firm. This 
means that Nationality has an influence on earning quality.



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RESULTS AND DISCUSSION
The primary objective of  the research was to investigate 
the connection between board diversity and the 
profitability of  non-financial companies registered on 
the Ghana Stock Exchange. According to Francis et al. 
(2003), investors use EQ as a conditional variable to 
source high valuation knowledge from earnings trends. 
Earnings are regarded as being of  greater quality when 
they provide decision-makers with additional information 
about a firm’s financial results (Dechow et al., 2010).
The study’s goal was to determine how gender diversity 
among non-financial registered firms on the Ghana Stock 
Exchange affects earnings quality. Gender diversity was 
found to have a p-value of  0.022, which is less than the 
p-value of  0.05. This suggests that the profitability quality 
of  non-financial registered firms on the Ghana Stock 
Exchange is significantly impacted by gender diversity. 
Similar to this, Ain et al. (2021), study shows that gender 
diversity on the board has the biggest influence when 
there are three or more female directors, as opposed to 
just one or two.
Kazemi and Abdi’s (2019) findings also show that the 
quality of  earnings is significantly affected by the presence 
of  women on audit committees. Instead, the findings 
indicated that the quality of  the company’s earnings is 
not significantly impacted by gender diversity on the 
board of  directors. When women are well-represented 
among senior business executives, financial reporting and 
managerial control are of  higher quality.
Also, Zalata et al. (2022), findings indicated that only 
feminine directors with relevant financial perspectives 
and fewer outside directorships can reduce earnings 
management; as a result, overcommitting seasoned 
female directors with more exterior directorships 
would decrease their monitoring ability. Regardless of  
their outside directorships or tenure, the study did not 
identify any evidence indicating that female directors 
without appropriate financial expertise can mitigate profit 
management. 

The study’s second goal was to investigate the impact 
of  age diversity on the profitability of  non-financial 
registered firms on the Ghana Stock Exchange. According 
to Sonnenfeld (2002) and Darmadi (2011), Age can be 
viewed as a broad asset and is part of  human capital 
because it can reflect experience and risk-taking. In the 
business world of  today, youthful directors are constantly 
involved, while the majority of  board members are older 
(Gilpatrick, 2000). 
Age diversity has a p-value of  0.500, which implies that it 
has no apparent impact on the earnings quality of  non-
financial companies listed on the Ghana Stock Exchange, 
according to the study’s findings. This result shows that 
the quality of  profits of  non-financial companies listed 
on the Ghana Stock Exchange is unaffected by the age 
diversity of  the board of  directors. 
However, Hoang et al. (2017) study contradicts this study’s 
findings, showing a non-linear, U-shaped link between 
age diversity in boards and earnings quality instead of  
a strong and positive linear relationship between age 
diversity of  boards and earnings quality. The same is true 
of  Almomania et al. (2020), who discovered that while 
board religion has no momentous influence on earnings 
quality, board gender, board experience, and board age 
do. This shows that a key explanation for the quality of  
earnings is provided by corporate governance.
Examining the impact of  nationality on earnings quality 
among non-financial listed firms on the Ghana Stock 
Exchange was the study’s third goal. According to Fidanoski 
et al. (2014), there are several governance principles that 
promote the appointment of  members of  various nations 
to the board of  directors to reflect the nationality variety of  
its stakeholders, consumers, and employees.
The findings of  the study indicate that nationality has 
an impact on the standard of  earnings. This finding 
suggests that nationality diversity has a major impact 
on earnings quality. The study’s findings supported the 
claim made by Van den et al (2005) that the addition of  
foreign directors can enhance the standard of  the board’s 

Table 8: Nationality and Earnings Quality
Source SS df       MS Number of obs 55

F(  5,    49) 3.88
Model 1.368 5 .27365 Prob > F 0.005
Residual 3.457 49 .0705 R-squared 0.284

Adj R-squared 0.210
Total 4.826 54 .0893 Root MSE 0.266
Earnings Quality Coef. Std. Err. t P>|t| [95% Conf. Interval]
Firm size -0.041 .0135 -3.05 0.004 -0.0687 -0.014
Firm sector -0.039 .1061 -0.37 0.712 -0.2527 0.174
Inflation -0.001 .0118 -0.08 0.939 -0.0248 0.023
GDP -0.020 .0113 -1.74 0.088 -0.0425 0.003
Nationality -0.447 .1887 -2.37 0.022 -0.8270 -0.067
_cons 0.812 .2511 3.23 0.002 0.3070 1.316

Source: Author’s Estimation.



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deliberations. Additionally, the research by Hashim et al. 
(2019) demonstrates that ethnic and national diversity is 
found to significantly affect the earning quality of  the 
selected companies. Age and gender diversity, however, 
do not appear to have a major effect on the quality of  
wages. The findings of  Khan and Abdul Subhan (2019) 
presented an intriguing picture of  board diversity and 
company financial performance. Due to varying cross-
cultural views and communication hurdles, nationality 
diversity is inversely correlated with corporate financial 
performance (Khan and Abdul Subhan, 2019).
Evidence from Kouaib and Almulhim (2019) shows 
that non-European directors are positively linked with 
earnings-management activities, whereas accruals-based 
and real earnings-management activities are inversely 
associated with board gender diversity. Results from 
Makhlouf  et al. (2018) demonstrate that accounting 
conservatism is highly positively connected with gender 
diversity, education level, and nationality diversity. The 
data, however, do not demonstrate any appreciable 
impact of  directors’ age on accounting prudence.

CONCLUSIONS
This research’s key goal was to examine the connection 
between board diversity and the earnings quality of  
non-financial companies quoted on the Ghana Stock 
Exchange. The study revealed that the board diversity 
variables, including gender and nationality diversity, 
affected the company’s earning quality. While it was 
discovered that age diversity had little or no impact on 
earnings quality. Overall, it was discovered that board 
diversity significantly and favorably impacts the earnings 
quality of  the businesses registered on the Ghana Stock 
Exchange. The study concluded that businesses with a 
more diversified board seem to be more likely to have 
earnings that are of  higher quality.
The study advises management of  publicly traded 
companies to actively adopt more diverse boards, 
particularly in terms of  gender diversity because it is 
linked to an increase in earnings management. Companies’ 
Shareholders should be aware of  the advantages of  
having a gender-diverse board, particularly in thwarting 
management’s manipulation of  the books of  accounts 
to portray a particular image. To reduce the number 
of  enterprises that fail in large numbers, the study also 
wants to advise policymakers to keep implementing the 
laws pertaining to gender diversity. The financial markets 
should ensure that diversification standards are carefully 
adhered to, to prevent accounting fraud and businesses’ 
widespread failure due to long-term losses concealed by 
accounting fraud meant to show successful performance. 
The research recommends that another research be 
undertaken that includes both secondary and prime 
data since some elements of  board diversity cannot be 
adequately studied via the use of  secondary data. Another 
study should be carried out on non-financial companies 
as well as other companies that are not non-financial 
companies to encourage cross-industry comparison since 

the present investigation was only carried out in Ghana’s 
publicly traded non-financial companies.

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