Do Women Directors Impact the Risk and Return of Indian Banks?

Abstract

The purpose of the paper is to investigate whether women directors impact the risk and return of Indian banks. This study employs panel data models for a sample of 29 Indian banks that form part of the National Stock Exchange 500 index for the period 2009–2016. This paper concludes that women directors influence the accounting returns (measured through Return on Assets) of Indian banks. However, it was found that women directors did not affect the risks (measured through Equity Beta and gross NPA to Total Assets) of the sample banks. This paper contributes to the literature and practitioners in several ways. To the best of the knowledge of the authors, no study has examined the impact of women directors on the risk and return of banks operating in India. Hence, the findings of this article have substantial implications both to academia and practitioners.

Do self-esteem and ethical leadership dampens Machiavellianism–effectiveness relationship: a parallel mediation approach

“…The banking industry in India is the bedrock of the Indian economy, and at present, it is going through enormous changes, including reduced numbers of banks due to mergers, weak governance and increased leadership vigilance (Mitra, 2020;Shukla et al, 2021). In the last few years, the role of leaders has been questionable; therefore, the outcome of this study would be helpful to know how to control the dark personality traits of the leaders and how their effectiveness can be improved to reduce corruption?…”

“…The banking industry in India is the bedrock of the Indian economy, and at present, it is going through enormous changes, including reduced numbers of banks due to mergers, weak governance and increased leadership vigilance (Mitra, 2020; Shukla et al. , 2021).…”

Do bank managers use securitization gains to smooth earnings in the post- FAS 166/167 period?

“…Khan et al (2021) observed the link between feminine directors and CEOs in Pakistan as an emerging economy using Agency Theory and concluded that it has positive impact. Also, Shukla et al (2021) investigated 29 Indian banks over a period of 2009 to 2016 and concluded that women on boards influenced financial performance. Similarly, Suherman et al (2021) examined 264 non-financial corporations in Indonesia over 2013 to 2017 and found that women directors do not have significant effect on financial performance.…”

“…A growing body of empirical literature has shown that having greater number of women in top positions of publicly quoted corporations produces influence that is good for corporations' bottom-line (see Chijioke-Mgbame et al, 2020;Dwalikat et al, 2021;Gao, 2020;Garba & Abubakar, 2014;Hamilton, 2021;Khan et al, 2021;Lee, 2016;Mohamed et al, 2019;Oba & Fodio, 2013;Owolabi et al, 2021;Onyekwere & Babangida, 2022;Rossi et al, 2017;Shukla et al, 2021;Triana & Asri, 2017;Tu, 2017). However, in some others empirical investigations, women directors are not good for corporation bottom-line (Adnan et al, 2013;Aladejebi, 2021;Mirza et al, 2012).…”

Women in monitoring positions and market risk. Are the stocks of companies with gender diverse boards less volatile?

“…However, studies conducted on U.S. companies concluded that there was no relationship between gender-diverse boards and total risk (Bansak et al, 2011), or total, systematic and idiosyncratic risk (Sila et al, 2016). Similarly, a recent study of Indian banks, Shukla et al (2021) found no relationship between gender and systematic risk. Loukil et al (2020), analyzing a sample of French family businesses, reported that female inside directors increase idiosyncratic risk while female independent directors reduce it.…”