Does Board Structure Affect the Performance of Croatian Banks

Abstract

In this paper, the authors tried to examine whether and to what extent board structure influences bank performance. Although this issue has occupied scholars and researchers over the years, most of them relate to the US banking market or other developed countries and, to a much lesser extent, to the European markets. With the aim of fulfilling this gap, we decided to find out evidence on the aforementioned relationship in the banking sector in Croatia. Specifically, our analysis was conducted on a sample of Croatian banks and savings banks in the 2002-2013 period. Using four measures of board structure such as gender of the president of the management board, management board female members, supervisory board size and supervisory board female members and employing Arellano-Bover/Blundell-Bond estimator, the research results indicate that the supervisory board size and the participation of women as president of the management board do not make an influence on bank performance. However, the growth of the proportion of women in both management and supervisory boards negatively affects bank performance.