The impact of board diversity and sustainability engagement on bank performance

Purpose This study aims to investigate the impact of gender diversity in top management teams and boards on environmental, social and governance (ESG) performance. The authors propose a corporate social responsibility (CSR) committee as a moderating variable in this relationship, drawing on resource dependence and legitimacy theories. This study is crucial in understanding the dynamics of gender diversity and its impact on ESG performance in the banking sector. Design/methodology/approach The study examines a sample of Islamic and conventional banks from 10 Middle Eastern and North African countries during 2008–2022. Initial analysis was conducted using fixed effects panel regression, whereas the robustness test used the generalized method of movement dynamic system. Findings The findings, which are significant for both conventional and Islamic banks, indicate that female directors are crucial in promoting ESG performance in conventional banks. In contrast, female executives do not appear to contribute significantly. However, for Islamic banks, neither board nor executive gender diversity significantly affects ESG performance. Moreover, the find that the positive moderating role of the CSR committee is significant only for the nexus between board gender diversity and conventional banks’ ESG performance and for the connection between executive gender diversity and Islamic banks’ ESG performance. Originality/value Despite the widespread belief that gender diversity in top management teams is pivotal in promoting ESG performance, empirical studies supporting these claims are scarce, particularly in the banking sector. The study, therefore, brings a novel perspective to this discourse. These findings have the potential to significantly assist stakeholders in evaluating how gender diversity in top management teams influences banks’ sustainability practices, thereby empowering them to make more informed and impactful investment decisions.

Many factors influence human and social systems’ behaviour. The main aim of the current study was to check the status of intelligence in emotional, cultural, and ethical dimensions. Besides, the study examined the effect of those dimensions of intelligence on improving the performance of public and private banks in Ardabil. The current study was practical in terms of the method; cross-sectional in terms of time; inductive in terms of implementation logic; quantitative in terms of the implementation process; and causal in terms of purpose. The population of the study included the managers of public banks of Melli and Sepah and private banks of Pasargad, Eghtesad-e Novin, and Mehr of Ardabil. A questionnaire was set up by the researcher to evaluate the effects of intelligence in emotional, cultural, and ethical dimensions on the banks’ performance. The Cronbach test was used to test the reliability of the questionnaire. Descriptive statistics such as frequency, medium, and mean were used to describe the demographic of the participants. Inferential statistic tests such as Kolmogorov-Smirnov, regression, and independent t were used to analyse the data. The findings of the study showed that in both public and private banks, intelligence in emotional, cultural, and ethical dimensions had a positive impact on the performance of the banks. The effects of cultural intelligence on the performance of the public banks were more than the private banks. However, the impact of emotional and ethical intelligence on the performance of the private banks was more than the public banks.

PurposeThe Companies Act of 2013 stressed upon gender diversity in the board of management considering the significant role of women toward the success of an organization. Following it, both public and private sector banks in India implemented the act from 2015 onward. This study aims to investigate whether its implementation has improved board gender diversity uniformly across public and private sector banks. Furthermore, the authors study the impact of board gender diversity on the performance of public and private sector banks in India.Design/methodology/approachSecondary data on listed Indian commercial banks for the period 2015–2021 have been used in this study that encompasses 15 commercial and 12 public sector banks. Return on assets, return on equity and Tobin’s Q are considered as the banking performance indicators in this study, while gender diversity of the board is measured by using Blau index. Furthermore, generalized method of moments has been adopted to analyze the effect of board gender diversity on performance of the Indian banking sector.FindingsEmpirical results exhibit that board gender diversity has been gradually improving since 2015 in both public and private sector banks in India. However, board diversity in case of public sector banks is seen to be lower than that of private sector banks. Furthermore, this study found a significant impact of board diversity on the performance indicators of both public and private sector banks.Practical implicationsThis study gives a clear picture that board diversity of both public and private banks has remained quite low over the years. Apparently, women representation has been found to be less than 50% throughout the period of 2015–2021. As board diversity has significant impact on banking performance, it is important on the part of banks to take proper steps to improve the board diversity.Originality/valueThis study has added to the existing literature by highlighting on the divergence between gender diversity across public and private sector banks in India. It emphasizes on the need to improve gender diversity by a significant increase in the proportion of women in the board to create an impact on decision-making.

PurposeThe purpose of this study is to examine the impact of board diversity (e.g. nationality, gender and educational level) on financial performance for a sample of banks listed in 11 countries in the Middle East and North Africa region.Design/methodology/approachThis paper uses the system generalized method of moments estimation approach on the data of banks listed in the MENA countries over the period 2011–2018 to investigate the relationship between board diversity and financial performance. Also, the findings are supported by additional robustness tests, including ordinary least squares, fixed and random effect techniques.FindingsThe empirical results show that there is a significant relationship between board diversity and financial performance in banks. Specifically, the findings demonstrate that board diversity related to nationality has a significant positive impact on bank performance. The findings also show an insignificant association between gender and educational level diversity and bank performance. The robustness analysis supports the findings of the baseline model.Practical implicationsThe study provides multi-country evidence on the importance of board diversity in the MENA region and it sheds light on possible tracks for future reforms aimed at enhancing the effectiveness of the board’s functions.Originality/valueThis paper extends the existing literature by providing empirical evidence on the association between board diversity and financial performance of banks in the MENA countries. This paper also provides preliminary evidence on the importance of board diversity to influence financial performance.

This study investigates a relationship between risk governance characteristics and financial performance in public commercial banks across the Organization for Economic Co-operation and Development (OECD) countries. Drawing on the upper echelons theory (UET) (Hambrick & Mason, 1984), it hypothesizes a positive relationship between risk governance characteristics and financial performance. An econometric model is applied to a comprehensive dataset of bank-director years spanning from 2001 to 2019. The empirical findings provide robust evidence supporting a positive and statistically significant relationship between risk governance characteristics of bank directors and financial performance in public commercial banks (Adams et al., 2010). Banks with stronger risk governance structures and characteristics exhibit significantly higher financial performance outcomes. The implications of this study are twofold. Firstly, it highlights the crucial role of efficient and effective risk governance practices in boosting financial performance in the banking sector. The research suggests that banks can greatly benefit from robust risk management systems, enhanced board independence, and expanded director expertise. Additionally, the findings provide actionable guidance for bank directors, regulators, and policymakers in shaping risk governance frameworks and policies. These insights indicate that effective risk governance indirectly improves financial performance and bank stability.

Banks are profit making institutions and their performance is critical to their survival. Competition within the banking sector has seen most of these institutions adopt performance management tools that will enable them manage their performance. Many borrowers make a lot of effort to repay their loans, but do not get rewarded for it because this good repayment history is not available to the bank that they approach for new loans. On the other hand, whenever borrowers fail to repay their loans banks are forced to pass on the cost of defaults to other customers through increased interest rates and other fees. Put simply, good borrowers are paying for the bad borrowers and this is making new borrowers more and more hesitant to borrow credit. The ministry of finance, the Central Bank of Kenya and the Kenya Bankers Association have been at the forefront in the introduction of Credit Information Sharing (CIS) to the credit market. The reason for introducing this mechanism was because there was a need to access reliable information on their customers in order to make lending more efficient. Today we have a working CIS that enables all commercial banks to share their credit information through licensed Credit Reference Bureaus (CRBs).The aim of this study was to investigate credit reference bureau and its influence on the performance of banks in Eldoret, Kenya during the period 20052011.The study was guided by the following research questions; What is the number of defaulted loans three years before and after the introduction of the CRB model?, How have debts outstanding at the time of default been classified?, How has the financial performance of the banks been three years before and after the introduction of the CRB model? And what is the relationship between the loans default and the financial performance of the banks. This means that the study was assessing the performance of the loan portfolio within the banking sector and how this could have affected the financial performance of the banks. The study targeted a population of 179 respondents from which 97 respondents was sampled comprising of 31 branch managers, 31 credit managers and 35 credit reference bureau employees. The study consequently employed simple random sampling and census sampling technique to select the respondents and data was collected using secondary sources such as the data collection sheets and primary sources such as the interview schedules. Analysis was done through descriptive statistics where findings were presented in form of charts, graphs and tables. ANOVA was used to test the significance the study’s hypotheses. The study found that there was high number of defaults in the year 2008 and the lowest in the year 2010 with only 15.9% being defaulted. From the study, it was also found out that, most of the secured loans, that is, the loans with collateral were the long-term loans at 96%. More so, wholesalers were found to be the greatest defaulters with a default rate of 41.6% while mining companies and electricity, gas and water supply companies both had the least default rate of 0.9% each. The findings further shows that 1 year after a default occurs on average 48% of the sample’s exposure at default was recovered, 2 years after a default on average 62% of the sample’s facility exposure was recovered. On average the biggest portion of recovery was gathered in the first year after a default and is decreasing each year. It is the recommendation of this study that lenders should appreciate the need for strategic control systems and consequently be able to develop other strategic control measures while enhancing effectiveness of CRB. It is also the recommendation of this study that lenders should identify strategic control measures that match their institution’s objectives and thus will ensure high performance of such firms. Key Terms: Credit Reference Bureau, Financial performance, Strategic Control . Credit Reference Bureau (CRB) As A Strategic Control Measure And Its Influence On The... DOI: 10.9790/0837-20514464 www.iosrjournals.org 45 | Page

This study has primary two aims. The first is to determine the characteristics of boards of directors in the Turkish banking industry and the second is to investigate the effect of board diversity on performance of the banks. The analyses in this study are built on the banking industry of Turkey in the period from 2008 to 2012. The impact of the board diversity, as measured by the percentage of women and foreign directors on the board and the Blau index, on financial performance is investigated by conducting panel data analysis. The findings of the study provide evidence of a negative relationship between board diversity and financial performance. Hence, the findings do not support the economic case for board diversity, which implies that diverse directors will increase the financial performance of the banks. This study provides additional evidence to the sparse literature regarding the association between board diversity and financial performance in an emerging market context. Furthermore, most prior studies regarding the relationship between gender diversity and performance have excluded financial firms from their samples. In addition, there are few studies that examine the impact of foreign directors on the performance of banks.

This study analyzed data on the performance of public sector banks (SBI and BOB) and private sector banks (HDFC Bank and ICICI Bank) from 2018 to 2023 in India. The financial status and performance of banks are crucial for the ‎economy. By using descriptive statistics, important financial ratios, the CAMEL framework, multiple regression analysis, and Efficiency analysis, the study concludes on the major differences and trends. The findings of the study reflect the major ‎improvement in the performance of Private Sector banks, especially HDFC Bank, in respect of ‎efficiency, profitability, asset quality in terms of ROA, ROE, NIM, and NPA ratios. It was ‎also highlighted in the study that few improvements have been made in the performance of ‎public sector banks, but still, they fail to compete in terms of efficiency, profitability, and asset ‎quality with Private Sector banks. Moreover, the study also distinguished that the changes in ‎the macroeconomic variables do impact the bank’s performance. Therefore, the study also ‎indicates the possible additional determinants that can be further investigated. The ‎findings of the study are hence significant for bank managers and policymakers while ‎taking necessary corrective measures and recommendations for the improvement in the ‎financial health and competitiveness of public sector banks. The key recommendation of the ‎study, hence, is to adopt efficient operational and risk management practices.

The background of corporate governance dates back to the 19th Century when state corporation laws enhanced the rights of corporate boards without unanimous consent of shareholders. The concept propounds that corporation should have a good board structure in order to enhance performance. It is firmly rooted on the assumption that good corporate governance practices enhance corporate performance. However, there is no consensus on the impact of corporate governance on performance. The increasing role of the financial sector, on both economic development and poverty alleviation, has seen the concept being applied more on the financial sector than before; this has been further aggravated by world financial crisis, and its consequences. In this regard, Zimbabwe is no exception, during the period 2003-2009 the Zimbabwe witnessed unprecedented failure in the financial sector rooted from a number of issues; but chief among them has been cited as poor corporate governance practices. However, there have been mixed feelings on the extent to which bank performance can be attributed to corporate governance. The paper presents the findings of the study that was conducted to investigate the impact of corporate governance on the performance of commercial banks in Zimbabwe. Using data gathered from 2009-2012, for a sample of five commercial banks, it applies multi-regression model, to assess the causal relationship between corporate governance measures (board size, board composition, internal board committees and board diversity) and bank performance. The results indicate unidirectional causal relationship from corporate governance to bank performance. In addition, there a positive relationship between board composition, board diversity and commercial bank performance, although a negative relationship appears between board size, board committees and bank performance. Therefore, in order to improve performance in commercial banks good corporate governance practices must implemented, this includes improving board structures, disclosure, and fiduciary duties of directors. On the hand the Reserve Bank of Zimbabwe should ensure or put in place robust supervisory and regulatory policies; the development and implementation of a national corporate governance code is long overdue. DOI: 10.5901/mjss.2014.v5n15p93

The role of board members has become increasingly important in corporate governance, particularly in the banking sector, which is a key part of the economy. This study aims to examine how the characteristics of boards of directors affect the financial performance of commercial banks listed in Vietnam. The analysis is based on data from 26 listed commercial banks over a sixteen-year period (2008–2023). Quantitative regression methods are used to assess the impact of board diversity on financial performance. The findings show that certain board characteristics—such as gender, level of education, presence of independent directors, and government ownership—have a negative effect on the performance of banks in Vietnam. However, the study also finds that state-owned banks tend to perform better, likely due to easier access to resources and government support during economic downturns. These results provide useful insights for listed banks in Vietnam to improve their board structure, which is crucial for enhancing financial performance.

This study examines whether ERM implementation is related to bank performance in Indonesian public banks. Using a sample of 32 public banks for the period of 2017-2021, this study found that ERM implementation are positively and significantly related to overall bank performance, as measured using CAMELS ratio. The results of this study support the argument using signalling and stakeholder theory, which states that banks show their commitment to the risk management process to their stakeholders through disclosure, so as to gain and maintain the trust of stakeholders, which can be reflected in bank performance. This study also found that some bank characteristics, namely age, leverage and share price volatility, have a negative and significant influence on bank performance. Furthermore, as an additional test, this study also found that there is a positive and significant effect of ERM implementation on bank performance during the Covid-19 pandemic period. Lastly, through sub-index analysis this study identifies that better risk organization has a positive and significant influence on bank performance.

This study identifies and analyzes the relationship between the diversity of the board of directors and the president director's educational background on the bank's financial performance. Based on 38 samples of Indonesian banks that have been listed on the Indonesia Stock Exchange. This study examines the static and dynamic relationship between the framework, which controls for the specific effects of each of the factors being tested. The results of this study indicate a significant influence and direction of negative correlation between gender diversity and citizenship diversity on bank financial performance. This study also shows a significant influence and direction of a positive correlation between the president director with an economic or business education background on the bank's financial performance. This study also discusses several managerial implications for banking companies and recommendations for the government in relation to the regulation of the board of directors of banks in Indonesia. DOI : https://doi.org/10.26905/jkdp.v25i2.5154

Purpose – This paper discusses the diversity of boards and the performance of Islamic banks in three different conditions. Specifically, I will prove whether the diversity of the board is important for the performance of Islamic banks in normal conditions, turbulence, and recovery. Methodology – The data includes all Islamic and conventional commercial banks in Indonesia during 2018-2022. The research period is divided into normal, turbulent, and recovery conditions. The data were analyzed with a panel regression model. Findings – The results show that the level of board diversity in Islamic banks is lower than that of their conventional counterparts. In general, the level of board diversity is very important to encourage better bank performance. The effect of board diversity on performance is only significant in recovery conditions, but in times of turbulence, it is the opposite. In addition, I also find that diversity is most important for the BoD, while for the BoC it is the opposite. Novelty – This study is different from previous research. This study examines the factors of board diversity as a whole and focuses on board diversity as a whole. Therefore, this research will better reflect the actual conditions. Originality – This is the first paper to study the relationship between board diversity and bank performance in three conditions. It is also the first to compare the effects of diversity on Islamic banks with their conventional counterparts.

Women as Gold Dustt: Gender Diversity in Top Boards and the Performance of Italian Banks

Purpose: The study examines the financial performances of selected Public Sector Undertaking Banks (PSUB) and Private Sector Banks (PSB). Furthermore, this study examines banks' efficiency concerning various financial aspects such as stability, liquidity, and profitability and their impact on financial performance.
 
 Theoretical framework: Numerous studies have been conducted to evaluate the financial performance of commercial banks. But after the COVID pandemic, only a few studies were conducted on the performance of banks. However, there is still much to assess regarding the comparative financial performance of public and private sector banks in India.
 
 Design/methodology/approach: The study of financial performance of banks conducted on six PSUB and six PSB are selected based on advances as a percentage of deposits with the top three and bottom three banks from the PSUB and PSB. This research compares PSUB to PSB using a T-test for independent samples. The data is collected from secondary sources gathered from annual and RBI annual reports from 2017 to 2021.
 
 Findings: Results from a comparison test show that, even though PSUB has made a lot of progress, they are still not performing up to the standard that PSB set. According to the report, PSB outperformed PSUB in the areas of CAR, NPA to NA, PPE, ROA, and liquid assets to total deposits concerning the CAMEL approach.
 
 Research, Practical & Social implications: Future studies can consider other indicators of CAMEL components, like the percentage of gross NPA, net profit margin, interest income to total funds, operating expenses to total funds, credit deposit ratio, cash to deposit ratio, and some other samples of banks, to assess the financial performance of banks.
 
 Originality/value: This research focuses on the financial performances of selected PSUBs and PSBs. The findings of this scholarly article state that the performances of the PSBs are the best, which means the PSUBs are lacking towards the customers in their performances. This research may be helpful to the policymakers in the PSUBs to identify their problems and rectify them.