Gender Diversity on Banking Boards: A study on gender diversity on boards and the impact on performance from 2007- 2010

Preben B. Johannessen

Student thesis: Master thesis

Abstract

This thesis examines the gender disparity present amongst banking boards and its subsequent impact on company performance within a selection of established international banking companies, spanning from the period of 2007-2010. The empirical research conducted within this thesis was undertaken using 165 companies operating within the banking sector from a range of geographical areas; 33 from North America, 71 from Asia, 51 from Europe, 5 from Australia and 5 from “Other” parts of the world. The geographical diversity of the population sampled encouraged the discovery of three key findings. Firstly, the research suggested that gender diversity resulted in limited improvement over the four year period examined. Though there were slight increases in the quantified representation of women on boards throughout four geographic regions, the banks from the “other” region showed a general decline in performance. Secondly, the empirical research indicated that banking boards with female directors in Europe/Australia and Asia/Others had significantly higher averages of ROAE and stock growth performance in comparison to boards void of any females. For Asia/Others this relationship was found for ROAA as well. However, this relationship of improved performance was not found for ROAA of the European/Australian banks, where contrary results were produced. In North America the banks with three or more female directors showed the highest averages of ROAE, ROAA and stock growth. Finally, the hypothesis within this paper tested for the existence of a positive correlation between the percentages of female directors in relation to three performance variables; ROAE, ROAA and Stock performance. The results show that only ROAE and the percentage of female directors in Asia had a positive correlation in each of the four years examined. For the hypotheses relating to North America, Europe, Australian and Other, inconclusive mixed correlations were produced. Therefore, it appears that only one conclusion can be drawn to suggest a link between the percentage of women and ROAE in Asia.

EducationsMSc in Finance and Strategic Management, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2012
Number of pages100