Women in Bank Boardrooms and Their Influence on Performance and Risk-Taking

52 Pages Posted: 25 May 2010

Date Written: April 6, 2010

Abstract

We assess the role of women in bank boardrooms in a sample of 461 large banks from OECD countries. After controlling for bank and country specific effects, we find that women’s participation in boardrooms, both presence and percentage, has a positive influence on the return equity, the return on assets and the operating income ratio. We also find a negative relation between women’s presence in boardrooms and risk-taking measures namely loan loss reserves, loan loss provisions and impaired loans ratio. These relations hold for the supervisory board, and with some exceptions for the audit committee. For a sub-sample of 134 listed banks we find that markets have a positive perception of women’s participation on the board, supervisory board and audit committee, measured by Tobin’s Q. Our findings are robust to reverse causality with two instruments – size and the product between the percentage of women on boards and restrictions on banking activity. We discuss the implications of our findings.

Keywords: Banks, Board of Directors, Gender Diversity

JEL Classification: G20, G30, J16

Suggested Citation

Gulamhussen, M. A. and Santos, Sílvia Maria, Women in Bank Boardrooms and Their Influence on Performance and Risk-Taking (April 6, 2010). Available at SSRN: https://ssrn.com/abstract=1615663 or http://dx.doi.org/10.2139/ssrn.1615663

M. A. Gulamhussen (Contact Author)

Vlerick Business School ( email )

Bolwerklaan 21, 2nd floor Manhattan Center
Sint-Joost-ten-Node
Brussels, 1210
Belgium

Sílvia Maria Santos

Bank of Portugal ( email )

Rua Francisco Ribeiro, 2
Lisbon, 1150-165
Portugal

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