Women in Bank Boardrooms and Their Influence on Performance and Risk-Taking
52 Pages Posted: 25 May 2010
Date Written: April 6, 2010
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: Suggested Citation