Board diversity and financial fragility: Evidence from European banks

Farag, Hisham; Mallin, Christine

doi:10.1016/j.irfa.2016.12.002

Cited by 146 publications

(166 citation statements)

References 64 publications

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“…Recent studies have tested for the presence of a nonlinear relationship between board gender diversity and bank financial performance. Farag and Mallin () and Owen and Temesvary (), respectively, find that a threshold of women on bank boards increases profitability or reduces financial fragility. It is important to note that these results are based on a different bank sample but suggest that the nonlinear linkage persists regardless of the geographical context.…”

Section: Literature Review and Hypothesesmentioning

confidence: 99%

“…In the banking sector, to the best of our knowledge, the studies analysing the critical mass of female directors mainly focused on bank vulnerability to financial crisis (Farag & Mallin, ) or on financial performance (Owen & Temesvary, ) and not on the banks' environmental performance. Therefore, we move forward from this evidence, concentrating on the critical mass theory for the banking sector to advance the following hypothesis:H1 A critical mass of women on the board of directors has a positive impact on the environmental performance of banks.…”

Section: Literature Review and Hypothesesmentioning

confidence: 99%

“…We intend to endogenously identify the value of the critical mass of women on the board by including a quadratic term of the proportion of female directors on the board. Hence, we compute the turning point in the predicted environmental performance of banks (Farag & Mallin, ; Joecks et al, ). Finally, we provide a novel application of the homophily theory by arguing that the CEO's gender plays a crucial role in shaping the impact a board's gender diversity has on the environmental performance of banks.…”

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

The impact of women leaders on environmental performance: Evidence on gender diversity in banks

Birindelli

Iannuzzi

Savioli

2019

Corp Soc Responsibility Env

216

215

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This study analyses the impact of women leaders on environmental performance in a sample of 96 listed banks in the EMEA (Europe, Middle East and Africa) region from 2011 to 2016. Gender diversity in leadership positions is explored through women in the board of directors, chief executive officer gender, and the interaction between these two aspects. This study sheds light on inconsistent results in prior literature by testing three theoretical perspectives: gender difference, critical mass, and homophily. The main results suggest that there is nonlinear relationship between women directors and the environmental performance of banks and that female chief executive officers play a strategic role in shaping this relationship, by confirming the homophily perspective for the banking sector. Therefore, leader gender diversity is an important driver of environmental sustainability in banks, which are increasingly involved in environmental issues either directly, as companies, or indirectly, through their lending activity.

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Section: Literature Review and Hypothesesmentioning

confidence: 99%

Section: Literature Review and Hypothesesmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

The impact of women leaders on environmental performance: Evidence on gender diversity in banks

Birindelli

Iannuzzi

Savioli

2019

Corp Soc Responsibility Env

216

215

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“…The issue of female representation in top management teams is a growing area of interest among practitioners, policymakers, and researchers around the world (Ahmadi, Nakaa, & Bouri, 2018). In particular, there has been an ongoing debate about whether gender diversity in top management teams relates to company performance, more specifi cally fi nancial performance (Farag & Mallin, 2017;Hernandez-Nicolás et al, 2015).…”

Section: Introductionmentioning

confidence: 99%

“…The upper echelon theory emphasizes the critical role of top management teams on organizational strategic decisions and performance (Hambrick & Mason, 1984). The theory further states that top managers' observable and unobservable background characteristics play a signifi cant role in organizational decision-making and ultimately in organizational outcomes (Hambrick, 2007). Thus, to explain organizational outcomes and eventually fi nancial outcomes, it is necessary to consider the characteristics of the top management team.…”

Section: Introductionmentioning

confidence: 99%

Top Management Team Composition and Financial Performance: Examining the Role of Gender Diversity

Egerová¹,

Nosková²

2019

E+M

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Despite the growing research on the effect of top management team gender diversity on company fi nancial performance, the results remain inconclusive. The theoretical framework guiding this study includes the upper echelons theory and critical mass theory. Under the upper echelons theory framework, the study investigates whether female participation in top management teams positively infl uences company fi nancial performance. Based on critical mass theory, the study attempts to determine what percentage of women in a top management team constitutes a critical mass. Unlike most previous studies, both theories are applied to only the context of 823 small-and mediumsized enterprises (SMEs) with a workforce between 50 to 250 employees in the manufacturing sector in the Czech Republic. The fi ndings indicate that the premises of the upper echelons theory are also applicable to SMEs. At the same time, the fi ndings show limited support for critical mass theory. More specifi cally, this study does not support a linear relationship between the number of women in top management team and fi nancial performance and only partially supports a U-shaped curvilinear relationship. The implications of the fi ndings and suggestions for future research are also discussed. In sum, this study brings new insight to the area of gender diversity in top management and advances the gender diversity literature's understanding of the relationship between top management team composition and company fi nancial performance. Moreover, the study provides a better understanding of the key role of a critical mass in top management teams.

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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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Board diversity and financial fragility: Evidence from European banks

Cited by 146 publications

References 64 publications

The impact of women leaders on environmental performance: Evidence on gender diversity in banks

The impact of women leaders on environmental performance: Evidence on gender diversity in banks

Top Management Team Composition and Financial Performance: Examining the Role of Gender Diversity

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

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