Board Internationality and Corporate Performance: Theory and Evidence from the International Passenger Airline Sector

This paper examines the effect of foreign board membership on international passenger airline performance measured from a shareholder perspective. Using a global sample of firms involved in the international passenger aviation business (n=128), the application of linear regression methods indicates a significant positive relationship between board internationality and international passenger airline performance. Increasing the level of board internationality by appointing a foreign member to the board adds value to the airline in a way that it improves the respective airline’s (accounting) performance. Also, the study provides evidence for the presumption that the degree of an airline’s international business operations positively moderates the relationship between board internationality and (accounting) performance.