Banks’ CSR reporting – Do women have a say?

Abstract

Purpose This paper aims to determine the association between corporate social responsibility (CSR) reporting of listed banks and female representation on boards while controlling for the impact of gender quotas. Design/methodology/approach Logistic regressions are used with bank fixed effects on a global sample of 285 commercial banks from 2005 to 2017. Findings There exists a positive association between the proportion of women on board and banks’ CSR disclosure. Positive association remains also after quota corrections for banks with either below- or above-quota female representation. Further, adding more women to boards than required by quota could affect boards’ CSR reporting in masculine countries but not in feminine countries. Research limitations/implications The results are not generalizable to smaller listed banks and the used estimation approach does not enable to detect causality. Practical implications Policymakers interested in improving banks’ CSR reporting could introduce gender quotas. Social implications Gender quotas can enforce banks’ sustainable behaviour. Originality/value First, it is the first study to thoroughly control for gender quotas while investigating the association between female representation on boards and CSR disclosure. Second, this paper moves forward from the so-far predominant concentration on single-country studies on banks’ CSR reporting. Third, this paper covers the aspect of a country’s masculinity-femininity as a factor that could influence the association between CSR disclosure and female representation.

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

“…García‐Meca et al (2018) find that in the banking sector, BGD favors the CSR information reporting, but this relation is moderated by the national cultural system. In comparison, the vast majority of the prior research confirms the positive relationship among board diversity and CSR (Birindelli et al, 2018 [international]; Kiliç et al, 2015 [Turkey]; Orazalin, 2019 [Kazakhstan]; Tapver et al, 2020 [international]). Female directors bring more insight and perception perspectives to the board and consequently enhance the CSR reporting (Kiliç et al, 2015).…”

“…This theory is typically linked to the conflict of interest result from the ownership separation (Fama & Jensen, 1983; Jensen & Meckling, 1976). The board diversity literature used it to explore topics such as board diversity influence on the agency conflict and performance of financial firms (Bektas & Kaymak, 2009; Boadi & Osarfo, 2019; Farag & Mallin, 2017; Ghosh, 2017; Kaymak & Bektas, 2008; Kusi, Gyeke‐Dako, Agbloyor, & Darku, 2018; Shettima & Dzolkarnaini, 2018; Talavera, Yin, & Zhang, 2018), CSR reporting quality of financial sector (Tapver, Laidroo, & Gurvitš‐Suits, 2020), CSR practices (Isabel María García‐Sánchez, Martínez‐Ferrero, & García‐Meca, 2018), environmental, social, and governance performance (Birindelli, Dell'Atti, Iannuzzi, & Savioli, 2018), mergers and acquisition performance (Chu, Teng, & Lee, 2016; Hagendorff et al, 2007; Hagendorff & Keasey, 2012), risk taking (Abou‐El‐Sood, 2019; De Vita & Luo, 2018; Yu et al, 2017), compensation policy (García‐Meca, 2016), audit fees (Nehme & Jizi, 2018), earnings management (Fan, Jiang, Zhang, & Zhou, 2019), determinants of banks' bailouts (Fernandes, Farinha, Martins, & Mateus, 2016), and banks' efficiency (Ramly, Chan, Mustapha, & Sapiei, 2017). It is noteworthy that the agency argument helps us to understand the supervisory role of the board members to monitor and control management activities, whereas multiple theoretical perspectives enable us to better interpret the other roles of the board of directors.…”

“…It is noteworthy that the agency argument helps us to understand the supervisory role of the board members to monitor and control management activities, whereas multiple theoretical perspectives enable us to better interpret the other roles of the board of directors. Therefore, a growing number of studies utilize multiple theoretical frameworks (i.e., Abou‐El‐Sood, 2019; García‐Meca, 2016; Tapver et al, 2020).…”

“…Stakeholders include the company's employees, creditors, suppliers, community, and even competitors. In board diversity of financial institutions, eight studies have employed this theory (Abou‐El‐Sood, 2019; Birindelli et al, 2018; García‐Sánchez et al, 2018; Kiliç et al, 2015; Kusi et al, 2018; Mohammad et al, 2018; Orazalin, 2019; Tapver et al, 2020). This theoretical perspective has become more prominent in recent years because scholars have now realized that the actions and contributions of each director to the board are different from one to another, depending on the age, experience, gender, ethnic, education, nationality, tenure, and so forth.…”

“…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.…”