This study aims to examine the effect of unrelated diversification on firm performance to analyze board of directors’ diversity as a moderator of unrelated diversification and firm performance. Unrelated Diversification is measured using the entropy index used by Jacquemin and Berry (1979) and board of directors’ diversity using Blau Heterogeneity Index. The results show that unrelated diversification does not affect the performance of the company due to institutional condition of Indonesia. However, the board of directors’ tenure diversity as moderating variable strengthen the negative effect of unrelated diversification on the firm's performance. The gap between board tenure causes difficulties of communication, coordination, and information transfer between directors.