Does gender diversity on banks' boards matter? Evidence from public bailouts

Cardillo, Giovanni; Onali, Enrico; Torluccio, Giuseppe

doi:10.1016/j.jcorpfin.2020.101560

Cited by 91 publications

(77 citation statements)

References 77 publications

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“…The strength of corporate social responsibility engagement is measured by the ESG scores published by ASSET4‐Thomson Reuters, which is considered to be one of the most diligent and trustworthy sources of firm corporate social responsibility engagement (Stellner, Klein, & Zwergel, 2015) covering more than 4,500 companies around the world. The vector X i , t contains executive board characteristics and other bank‐specific variables that have been shown to impact on bank‐risk taking, and includes board size (Berger, Imbierowicz, & Rauch, 2016; Erkens, Hung, & Matos, 2012), independence (Pathan, 2009; Vallascas, Mollah, & Keasey, 2016), and gender diversity (Cardillo, Onali, & Torluccio,2020; Owen & Temesvary, 2018), and measures of bank size, capital, loan provisions, leverage, liquidity, efficiency, and profitability (Altunbaş et al, 2017; Altunbaş, Thornton, & Uymaz, 2019). Our data on European bank characteristics are from Bureau van Dijk Bank Focus and Asset4‐Thomson Reuter, which provide us with quarterly data for 81 banks headquartered in 19 European countries over 2007Q3 to 2018Q4.…”

Section: Models Methodology and Datamentioning

confidence: 99%

Do ESG scores effect bank risk taking and value? Evidence from European banks

Tommaso

Thornton

2020

Corp Soc Responsibility Env

168

130

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We examine whether environmental, social and governance (ESG) scores of European banks impact on their risk‐taking behavior and on bank value. We find that high ESG scores are associated with a modest reduction in risk‐taking for banks that are high or low risk‐takers, and that the impact is conditional on executive board characteristics. These findings are consistent with the “stakeholder” view of ESG activities. However, high ESG scores are also associated with a reduction in bank value consistent with the “overinvestment” view of ESG whereby scare resources are diverted from investment. The decline in bank value occurs notwithstanding a positive indirect link between ESG scores and bank value through their impact on risk taking. We conclude that there is a trade‐off between reducing bank risk‐taking and a more stable financial system on the one hand and bank value on the other.

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Section: Models Methodology and Datamentioning

confidence: 99%

Do ESG scores effect bank risk taking and value? Evidence from European banks

Tommaso

Thornton

2020

Corp Soc Responsibility Env

168

130

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“…Based on a sample from S&P’s 500, Đặng et al (2020) found that the presence of women on the BOD had a positive and significant influence on financial performance measured by return on assets (ROA). Cardillo et al (2020) discovered a positive relationship between board diversity of European banks and financial performance as measured by ROA and Tobin’s Q. Aggarwal et al (2019), Martínez and Rambaud (2019) and Ullah et al (2019) showed that board gender diversity increased the value of Indian, Spanish and Pakistani listed firms, respectively.…”

Section: Literature Reviewmentioning

confidence: 98%

Gender diversity and financial performance of Islamic banks

Jabari

Muhamad

2020

JFRA

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Purpose The purpose of this paper is to examine the influence of gender diversity among the board of directors (BOD) and Shariah supervisory board (SSB) members on the financial performance of Islamic banks in Indonesia and Malaysia. Design/methodology/approach Data for a sample of 19 Islamic banks for the period 2010–2018 were collected to test the research hypotheses using pooled ordinary least squares estimation method. Generalized least squares estimation method was used to confirm that the results are robust. This study lagged the explanatory variables by one period to control for potential endogeneity. Findings The findings suggest that Islamic banks with more gender-diverse BOD and SSB are expected to have better financial performance. In addition, this paper finds that an increase in Islamic banks’ size may undermine the positive impact of gender diversity among SSB members on Islamic banks’ financial performance. Research limitations/implications This study was conducted only on Islamic banks in Indonesia and Malaysia owing to data constraints; thus, the results may not be generalizable to Islamic banks in other countries. Practical implications Improving financial performance is crucial for banks, especially for Islamic banks, to sustain their fast-growing share globally. Therefore, the findings of this study are expected to provide insight and understanding in the selection and appointment of BOD and SSB members at Islamic banks. Social implications By having women represented in the BOD and SSB, Islamic banks will benefit equally from valuable abilities across demographic groups in the society. Furthermore, if the members of the BOD and SSB are properly selected, Islamic banks with more gender-diverse boards can effectively contribute to enhancing social welfare of various segments in the society. Originality/value This is the first study, as far as is known to the authors, that provides empirical evidence on the influence of gender diversity among BOD and SSB members on the financial performance of Islamic banks. This paper is expected to be used as a reference by the shareholders and customers of Islamic banks in ensuring that the BOD and SSB have the best optimal composition that maximizes their profits.

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“…The empirical studies have applied a wide range of regression methods including ordinary least square (Bektas & Kaymak, 2009; Cardillo, Onali, & Torluccio, 2020), probit (Fernandes et al, 2016; Nguyen et al, 2015), logit (Talavera et al, 2018; Tapver et al, 2020), 2SLS (García‐Meca, Uribe‐Bohórquez, & Cuadrado‐Ballesteros, 2018; Owen & Temesvary, 2018), Heckman (Gangi et al, 2019), the difference in difference (Arnaboldi et al, 2020b; Berger et al, 2014), weighted least squares (Fernandes et al, 2017), and generalized method of moments (GMM; Ghosh, 2017; Pathan & Faff, 2013). Interestingly, there is no study applying structural equation model.…”

Section: Slr Findingsmentioning

confidence: 99%

“…In our sample literature, 14 studies are grouped in this category. Two of them focused on the bailout of banks in European countries (Cardillo et al, 2020; Fernandes et al, 2016), capital structure (Adusei & Obeng, 2019; Palvia et al, 2014), intellectual capital (Al‐Musali & Ismail, 2015), innovation (Iren & Tee, 2018), conservatism accounting (Almutairi & Quttainah, 2019; García‐Sánchez et al, 2017), and ethical reputation (Baselga‐Pascual, Trujillo‐Ponce, Vähämaa, & Vähämaa, 2018). These topics have also received less attention to financial institution researchers, and more researches are encouraged to explore these topics with board diversity attributes.…”

Section: Slr Findingsmentioning

confidence: 99%

Nudging toward diversity in the boardroom: A systematic literature review of board diversity of financial institutions

et al. 2020

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Going beyond the mere gender diversity in the boardroom, this systematic review comprehensively covers the research on board diversity of financial institutions. More specifically, we cover gender diversity, as well as other characteristics of diversity, such as nationality, age, tenure, experience, education, ethnicity, and religion. A systematic literature review was employed using Scopus and Web of Science databases, covering all publications until May 2020, which resulted in 91 studies from 66 top‐ranked journals in accounting, finance, and economic fields. We analyze them based on the journal, methodology, research construct questions, and theoretical perspectives. Our results highlight the substantial knowledge gaps and the inconsistent findings of prior studies on several aspects of the field, suggesting avenues for further studies in terms of research designs, settings, scope, and theories. We argue that there is a need to explore other board diversity attributes rather than focusing on the gender diversity of the boards of financial institutions to achieve sustainable development. Also, more work is outlined on topics related to board diversity of financial firms that receive limited attention from scholars, such as (but not limited to) environmental performance, capital structure, intellectual capital, innovation and earnings quality of financial institutions, as well as the indirect effect of policy settings.

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Does gender diversity on banks' boards matter? Evidence from public bailouts

Cited by 91 publications

References 77 publications

Do ESG scores effect bank risk taking and value? Evidence from European banks

Do ESG scores effect bank risk taking and value? Evidence from European banks

Gender diversity and financial performance of Islamic banks

Nudging toward diversity in the boardroom: A systematic literature review of board diversity of financial institutions

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