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Numerous mergers and acquisitions, and the rise of MNCs with global customer bases have exposed the German board of directors to a variety of cultures. Despite the obvious relevance for corporate governance, the effect that cultural diversity of boards exerts on firm performance, Germany has been a blank spot in this literature. Using a sample of 101 German publicly listed companies, this empirical study answers if the level of cultural variety and cultural distance in boards of directors have an influence on firm performance. The results of this study indicate that cultural variety in boards of directors has a linear, negative influence on operational firm performance (as measured by ROI and ROE). This reinforces the fundamental assertion that executives’ cultural values shape their mindsets and orientations, and thus influence their decision-making. The results of this study, therefore, indicate that cultural diversity is an important diversity dimension that further on should be given careful consideration in research. Based on the findings, we argue against the blindfold implementation of (political) regulations in the area of board diversity.

PurposeDrawing upon social exchange theory and psychological contract (PC) research, this study aims to examine the impact of supervisors' fulfillment/non-fulfillment of transactional psychological contract (TPC) and relational psychological contract (RPC) promises on employees' reactions (e.g. feelings of violation, trust in the supervisor and organizational commitment) in a non-Western context, namely, the United Arab Emirates (UAE).Design/methodology/approachAn experimental field design was used with a sample of employees (N = 234) from a wide range of nationalities and work backgrounds. Four conditions were developed by manipulating the fulfillment of three TPC promises (e.g. competitive salary) and three RPC promises (e.g. sufficient power and responsibility). Participants were randomly assigned to the four conditions and asked to complete the study materials as if they were experiencing a real employment situation with a real organization. Hypotheses were tested using multivariate analysis of covariance and follow-up univariate analysis with Bonferroni post hoc comparisons.Findings This study demonstrated that a supervisor's failure to fulfill promises pertinent to both TPC and RPC, or one of them, generated negative reactions among participants. Based on a comparison of means analysis, this study also established that breach of TPC promises produced a higher negative impact than breach of RPC promises on perceptions of breach, feelings of violation, trust in the supervisor, organizational perceptions, organizational commitment and recommendation intentions. Furthermore, these findings revealed that a supervisor's breach of RPC promises has no significant incremental (additive) effect above a supervisor's breach of TPC promises. On the other hand, a supervisor's breach of TPC promises has a significant incremental (additive) effect above a supervisor's breach of RPC promises.Originality/valueThis study is one of the very few studies that examined and established, under a controlled setting, the differential effects of fulfillment/non-fulfillment of both TPC and RPC promises on employees' breach perceptions, emotions, attitudes and behavioral intentions.