Abstract
This paper investigates the impact of board diversity and CEO educational background on bank performance. Based on a sample of 54 UK publicly listed banks over the period 2005–2015, we examine the relationship of both static and dynamic modelling frameworks, which controls for individual specific effects and potential sources of endogeneity. The study reports a positive but insignificant relationship between CEO education and bank performance, and a positive significant association between gender diversity and bank performance. It further denotes a negative and significant impact of nationality diversity on bank performance. Our findings provide empirical support for the significance of the association between board diversity and firm performance. Our study also provides support for theories concerned with how corporate governance differs in financial institutions.
Highlights
In the new global economy, corporate governance has become a key issue for financial institutions
The bank assets, equity, and where i is the bank ID number (1-56), t denotes the financial measures were obtained from Bank the time period (2005–2015); BKPF refers to the Scope database and annual reports, while board bank performance measures used in the study diversity data which should be one of Tobin’s Q (TQ), ROAA, Return on Average Equity (ROAE), Net Interest Margin (NIM). were drawn from Fame, Bank Scope, and Boardex
This paper analyzes the relationship between board gender diversity, nationality diversity, Chief Executive Officer (CEO) educational background and bank financial performance using data of listed banks in the UK
Summary
In the new global economy, corporate governance has become a key issue for financial institutions. Bai and Elyasiani (2013) claim that the traditional governance standards of the non-financial institutions are no longer reliable when applied in the banking system, which has different stability requirements This motivates us to investigate the effect of CEO educational background and the effect of gender and nationality diversity on bank financial performance. This paper has several contributions to the literature It provides direct evidence on the relationship between board diversity and firm performance within the UK banks and provides more insights to research concerned with how financial institutions should be managed. This study makes a major contribution to research on bank governance by demonstrating how different constituents of bank boards can affect the performance of the bank and recommending governments and policymakers to pay more attention to board members and CEOs education in order to guarantee a strong financial system. The remainder of the paper includes an analytical review for the previous studies in the first section, details on the models and methods in the second section, data and empirical findings in the third section, summary and conclusion in the last section
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
