Abstract
Purpose - This study aims to investigate how culture can either reinforce or attenuate the board efficacy (a key element of corporate governance).
Design/methodology/approach - The study uses the data from the World Economic Forum (20062014) of 69 countries. The data were restricted to 69 countries because Hofstede et al. (2010) provided cultural value data from 111 countries. However, the data from 42 countries were incomplete for Hofstede et al.'s four dimensions.
Findings - The study is the first to show that more religious diversity has a significant negative impact on stronger board efficacy in evaluating corporate governance practices. The results also indicate that more uncertainty avoidance in a country has a significant negative impact and corporate ethics and auditing standards have a positive impact on board efficacy.
Originality/value - The study extends Hofstede et al.'s (2010) cultural value by incorporating religious diversity and corporate ethics as cultural variables in explaining board efficacy in corporate governance literature. The Organisation for Economic Co-operation and Development, the World Bank and the International Monetary Fund should focus on cultural factors while developing a single set of Corporate Governance Code worldwide.