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This study aims to examine the impact of boardroom diversity on the financial stability of Chinese financial listed firms. Boardroom diversity is quantified in the following aspects: relation-oriented diversity and task-oriented diversity.

Panel data on Chinese financial listed firms between 1998 and 2017 are used in this study. Panel regression is used to analyze the firm data for fixed effects and robust standard errors.

Task-oriented diversity of the board increases financial stability. Regarding the impact of boardroom diversity on firm risk, the results reveal that task-oriented diversity of the board reduces firm risk, which supports the predictions of this research. Regarding the moderating effect of state ownership on the relationship between boardroom diversity (task- and relation-oriented diversity) and financial stability, the results show that state ownership enhances the positive impact of the board’s task-oriented diversity on financial stability.

Task-oriented diversity of the board enhances the financial stability of Chinese financial listed firms. As existing studies on bank boards in China are limited, the findings of this research can be used when crafting policy initiatives to enhance financial stability.

To the best of the authors’ knowledge, this study is the first to examine the effect of boardroom diversity, particularly task- and relation-oriented diversity, on financial stability. It provides empirical support that boardroom diversity positively affects the financial stability of Chinese financial listed firms. This research also offers empirical evidence that state ownership enhances the positive impact of the board’s task-oriented diversity on financial stability.