Board gender diversity and bank performance in Jordan

Abstract

Board diversity is crucial for corporate governance and improves corporate outcomes by aligning management with stakeholders’ interests. Compared to advanced environments, Jordan’s decent sociocultural backdrop exhibits a higher level of gender bias. This study investigates the influence of board gender diversity (BGD) on Jordanian banking sector performance, an under-explored area. This quantitative paper employs Ordinary Least Squares (OLS), random, and fixed-effect approaches to analyze 182 bank-year observations for balanced longitudinal data analysis. These approaches correctly establish the BGD-Tobin’s Q nexus during 2010–2022. The coefficient of determination was 70.57%. The model confirms a positive correlation between BGD and market-based performance indicators. Findings support agency and resource dependency hypotheses, showing BGD’s role in decision-making. Hence, a one-unit increase in BGD causes a 37.2-cent increase in Tobin’s Q measure. Moreover, a one-unit change in board independence, board meetings, size, women’s representation in top management, and capital adequacy ratio, assuming all other factors remain constant, results in Tobin-Q changes of 2.57 cents, 32.8 cents, 5.78 cents, 51.2 cents, 30.55 cents, and 22.86 cents, respectively, and the same direction. The results show how BGD enhances bank performance and contributes to relevant theories. The results are vigorous in a variety of identification and estimation methodologies.

Enhancing Financial Metrics through Board Characteristics and Ownership Structures in Palestine

“…This research also employed accounting-based indicators such as return on assets (ROA) and return on equity (ROE) to ensure its reliability (Alodat et al, 2023;Mansour, et al, 2024a). These ratios are highly valuable for evaluating financial performance (Mansour, et al, 2024b). The primary regression equation used in the study is represented by the following model:…”

Board Gender Diversity and Cost of Debt: Evidence from MENA Region: Conceptual Paper

“…Scholars have debated the impact of board gender diversity on a company's cost of debt financing, examining it through the lenses of agency theory Mansour et al (2023c); Pandey et al (2020) and resource dependence theories (Mansour et al, 2023c;Mansour et al, 2024b). Jensen and Meckling (1976) agency theory highlights the significance of a diverse board of directors as the primary monitoring mechanism for corporate executives Mansour et al (2023d); Tanaka (2014), ensuring that managers prioritize the interests of shareholders.…”

“…According to the resource dependence theory, businesses heavily rely on external resources, making interaction with the external environment critical (Mia et al, 2022). Consequently, companies can achieve decreased risks and improved operational outcomes by promoting board gender diversity Alshirah et al (2022); Mansour et al (2024b), which ensures access to essential resources (Aksoy & Yilmaz, 2023;Awamleh et al, 2024). Surprisingly, the success of a company's trading activities relies heavily on the surrounding environment, and getting appropriate resources from these environments is vital for acquiring a competitive advantage (Mansour et al, 2024a;Marei, 2022;Mia et al, 2022;Pandey et al, 2020).…”

“…While there is a global enthusiasm to promote women's presence on corporate boards (Mansour et al, 2024b), men continue to be prioritized worldwide (La Rocca et al, 2020), including in MENA nations . In response to public pressure (Lundvall et al, 2017), big investors, and the media, various countries suggest increasing women representation in boardrooms as part of gender equality (Al-Nohood et al, 2024a;Saleh & Maigoshi, 2024).…”