EFFECT OF BOARD OF DIRECTORS GENDER DIVERSITY ON FINANCIAL PERFORMANCE OF DEPOSIT MONEY BANKS IN NIGERIA

Musa Bukar, Jerry Samuel Musa (PhD), Abdulrasheed Ahmed

Abstract


The financial scandals that engulfs the Nigerian Banking industry in late 2000, was mainly attributed to corporate governance failures and its attendant consequences has created a vacuum for studies to be undertaken. This study looks at how gender diversity (particularly women representation) affect performance of Nigerian banks from 2011 to 2015. The population and sample is made up of 16 (sixteen) banks listed on Nigerian Stock Exchange within the period. Board gender diversity was operationalized using 3 variables (that is women on board- WOB; women on board percentage-WBF; and presence of female chief executive- CEO) which formed the independent variables while financial performance has 2 variables (return on asset- ROA and return on equity- ROE). The study revealed that gender diversity has a significant positive effect on ROA and has no any effect on ROE. It therefore, recommend increase in number of women on board of directors, even though that skepticism exist towards policies that aims at increasing or encouraging women to such position in developing countries like Nigeria. Either due to cultural, social or religious alignment.


Keywords


gender diversity; performance; return on asset; return on equity; banks; women on board.

Full Text:

PDF

References


Ahern, K. R., & Dittmar, A. K., (2012). The changing of the boards: The impact on firm valuation of mandated female board representation. The Quarterly Journal of Economics, 127(1), 137–197.

Akinyomi, O. J., & Olutoye, E. A., (2015). Corporate Governance and Profitability of Nigerian Banks. Asian Journal of Finance and Accountancy, 7 (1), 172-182.

Akpan, E. O., & Amran, N. A., (2014). Boards Characteristics and Company Performance: Evidence from Nigeria. Journal of Finance and Accounting, 2 (3), 81-89.

Alvarado, N. R., Briones, J. L., & Ruiz, P. (2011). Gender diversity on boards of directors and business success. Investment Management and Financial Innovations, 8(1), 199-209.

Bagudu, H. D., Bazeet, B. O., & Alfa, A. B., (2015). The Vital Role of Gender Diversity on Corporate Outcomes: The Need for Empirical Studies Concerning Frontier Markets. Asian Journal of Finance & Accounting, 7(2), 183-200.

Bianco, M., Ciavarella, A., & Signoretti, R. (2011). Women on boards in Italy. (CONSOB Working paper number 70),7–44. https://doi.org/10.2139/ssrn.1945855.

Campbell, K., & Minguez-Vera, A. (2008). Gender diversity in the boardroom and firm financial performance. Journal of Business Ethics, 83(3), 435–451. https://doi.org/10.1007/s10551-007-9630-y.

Capezio, A., & Mavisakalyan, A. (2015). Women in the boardroom and fraud: Evidence from Australia. Australian Journal of Management, July 23, 2015, http://dx.doi.org/10.1177/031289621557946

Carter, D., Simkins, B. J. & Simpson, W. G. (2003). Corporate Governance, Board Diversity and Firm Performance. Financial Review, 38, 33-53.

Chanavat, A., & Ramsden, K. (2013). Mining the Matrices of Board Diversity. 1, 2-6.

Corkery, J. F., & Taylor, J. F. (2012). The gender gap: A quota for women on the board. Corporate Governance eJournal. Retrieved from http://epublications.bond.edu.au/cgi/viewcontent.cgi?article=1026&context=cge.

Dang, R., Nguyen, D. K., & Vo, L. C. (2013). Women on corporate boards and firm performance: A comparative study. Retrieved December 11, 2013, from http://events.emlyon.com/AFFI/Papers/252.pdf

Daunfeldt, S. O., & Rudholm, N. (2012). Does gender diversity in the boardroom improve firm performance? (HUI working papers no. 60). HUI Research.

Dezsö, C. L., & Ross, D. G. (2012). Does female representation in top management improve firm performance? A panel data investigation. Strategic Management Journal, 33(9), 1072–1089. https://doi.org/10.1002/smj.1955

Erhardt, L. N., Werbel, D. J., & Shrader, B. C. (2003). Board of Directors Diversity and Firm Financial Performance. Management Publications and Papers, 3 (19).

Fama, E. & Jensen, M. (1983). Agency Problems and Residual Claims. The Journal of Law and Economics, 26(2), 327-349.

Fan, P.S., (2012). Is board diversity important for firm performance and board independence? An explanatory study of Singapore listed companies. MAS staff paper No. 5.

Francoeur, C., Labelle, R., & Sinclair-Desgagné, B. (2008). Gender diversity in corporate governance and top management. Journal of Business Ethics, 81(1), 83-95. http://dx.doi.org/10.1007/s10551-007-9482-5

Fondas, N. & Sassalos, S., (2000). A Different Voice in the Boardroom: How the Presence of Women affects Board Influence over Management, Global Focus,12, 13-22.

Goergen, M., & Renneboog, L., (2014). Inside the board room. Journal of Corporate Finance, 26, 1-5. http://dx.doi.org/10.1016/j.jcorpfin.2014.05.004

Hassan, S. U., & Farouk, M. A. (2014). Board of Directors Characteristics and Performance of Listed Deposit Money Banks in Nigerian. Journal of Finance and Bank Management, 2(1), 89 – 105 www.aripd.org/Jfbm.

Ibenta, S. N., & John, E. I., (2016). Corporate Governance and the Performance of Nigerian Banks. International Journal of Economics, Finance and Management Sciences, 4(2), 39-45.

Ihemeje, J. C., Okafor, G., Ogungbagbe, B. M. & Edeoga, G. (2015). Internal Corporate Governance and the Performance of Commercial Banks in Nigeria. International Journal of Management Science and Business Administration, 1(2), 17 – 25.

Johansen, R. E. (2008). Gender Diversity and Firm Performance. An Empirical Approach. Diploma Thesis in Finance. Swiss Banking Institute. University of Zurich.

Johl, S. K., Kaur, S., & Cooper, B. J. (2015). Board characteristics and firm performance: Evidence from Malaysian public listed firms. Journal of Economics, Business and Management, 3(2), 239–243.

Joy, L., Carter, N. M., Wagner, H. M., & Narayanan, S. (2007). The bottom line: Corporate performance and women’s representation on boards. Catalyst, 3.

Kassey, K., Thompson S., & Wright, M. (1997). Corporate Governance; Economics Management and Financial Issues, Oxford University Press, UK.

Larkin, M. B., Bernardi, R. A., & Bosco, S. M. (2012). Corporate reputation, board gender diversity and market performance. International Journal of Banking and Finance, 9(1), 126.

Lincoln, A. A., & Adedoyin, O. (2012). Corporate Governance and Gender Diversity in Nigerian Boardrooms. World Academy of Science, Engineering and Technology, 71.

Letting’, N., Aosa, E., & Machuki, V. (2012). Board diversity and performance of companies listed in Nairobi Stock Exchange. International Journal of Humanities and Social Science, 2(11), 172-182.

Marinova, J., Plantenga, J., & Remery, C. (2010). Gender diversity and firm performance: Evidence from Dutch and Danish boardrooms. Tjalling C. Koopmans Institute, Discussion Paper Series, 10, 1–28.

Mohan, N. (2014). A review of the gender effect on pay, corporate performance and entry into top management. International Review of Economics & Finance, 34, 41-51. http://dx.doi.org/10.1016/j.iref.2014.06.005.

Mohammed, S. J., Abdullatif, M., & Zakzouk, F., (2018). The Effect of Gender Diversity on the Financial Performance of Jordanian Banks. Academy of Accounting and Financial Studies Journal, 22(2), 1-11.

Nguyen, T., Locke, S., & Reddy, K. (2015). Does boardroom gender diversity matter? Evidence from a transitional economy. International Review of Economics & Finance, 37, 184-202. http://dx.doi.org/10.1016/j.iref.2014.11.022.

Oba, V.C., & Fodio ,M.I. (2013). Boards’ Gender Mixas a Predictor of Financial Performance in Nigeria: An Empirical Study. International Journal of Economics and Finance, 5(2). ISSN 1916-971X E-ISSN 1916-9728.

Oludele, O. I., Oloko, M. A., & Tobiah, O. (2016). The impact of gender diversity on the financial performance of listed manufacturing companies in Nigeria, International Journal of Economics, Commerce and Management, IV (12) 291-605.

Omoye, S. A., & Eriki, P. O., (2013). Diversity in Board Ethnicity and Firm performance: An Empirical Investigation of Selected Quoted Firms in Nigeria. African Journal of Social Sciences, 3 (4), 35-45

Poudel, R. P. S. & Horvey, M. (2013). Corporate Governance and Efficiency in Nepalese Commercial Banks. International Review of Business Research Paper, 9(4), 53 – 64.

Rajula, V. A., (2016). Effect of Board diversity on Financial performance of Commercial Banks in Kenya. An Unpublished MBA Project. University of Nairobi, Kenya.

Reguera-Alvarado, N., de Fuentes, P., & Laffarga, J. (2015). Does board gender diversity influence financial performance? Evidence from Spain. Journal of Business Ethics, 1–14. doi:10.1007/s10551-015-2735-9.

Rhode, D.L. and Packel, A.K. (2010) Diversity on corporate board: how much difference does differences make?. Working paper, Rock Center for Corporate Governance. Available from:www.paper.ssm.com [Accessed: 03th August 2017].

Robinson, G., & Dechant, K. (1997). Building a business case for diversity. The Academy of Management Executive, 11(3), 21-31.

Rose, C. (2007). Does female board representation influence firm performance? The Danish evidence. Corporate Governance: An International Review, 15(2), 404–413. https://doi.org/10.1111/j.1467-8683.2007.00570.x.

Schwartz-Ziv, M. (2013). Does the gender of directors matter?. http://dx.doi.org//10.2139/ssrn.1868033.

Schwizer, P., Soana, M., & Cucinelli, D. (2012). The relationship between board diversity and firm performance: The Italian evidence. Retrieved from http://www.adeimf.it/new/images/stories/Convegni/Novara/Soana_Schwizer_Cucinelli_Board_diversity.pdf.

Shafique, Y., Idress, S., & Yousaf, H. (2014). Impact of Boards Gender Diversity on Firms’ Profitability: Evidence from Banking Sector of Pakistan, European Journal of Business and Management, 6 (7), 296-307.

Srinidhi, B., Gul, F. A., & Tsui, J. (2011). Female directors and earnings quality. Contemporary Accounting Research, 28(5), 1610–1644. https://doi.org/10.1111/j.1911-3846.2011.01071.x.

Stigring, C., & Lyxell, F. (2011). Is there a business case for gender diversity? Industriell och Finansiell Ekonomi,10/11(44), 1–26.

Sunday, O., & Godwin, O., (2017). Effects of Board Globalization on Financial Performance of Banks in Nigeria. International Journal of Academic Research in Accounting, Finance and Management Sciences, 7 (4), 1-10.

Terjesen, S., Couto, E. B., & Francisco, P. M. (2015). Does the presence of independent and female directors impact firm performance? A multi-country study of board diversity. Journal of Management & Governance, 1-37. http://dx.doi.org/10.1007/s10997-014-9307-8.

Uadile, O.M. (2010). The Impact of Board Structure on Corporate Financial Performance in Nigeria. International Journal of Business and Management, 5(10), 155-165.

Ujunwa, A., Okoyeuzu, C., & Nwakoby, I. (2012). Corporate board diversity and firm performance: Evidence from Nigeria. Review of International Comparative Management,13 (4), 605-620.

Wang, B. & Cliff, B. (2009)."Is there a “business case”for board diversity?” Pacific Accounting Review. 21, 11–34.

Willows, G. & van der Linde, M. (2016). Women representation on boards: A South African perspective. Meditari Accountancy Research, 24(2), 211-225.

Yawo, A. F., & Mathew, O. B., (2018). A Board Gender Diversity and Firm Performance: An Evaluation of the Nigerian Banking Industry, Research Analysis Journal of Applied Research, 4(6), 1721-1727.

Yap, I. L. –K., Chan, S. G., & Zainudin, R., (2017). Gender Diversity and Firms Financial Performance in Malaysia. Asian Academy of Management Journal of Accounting and Finance, 13 (1), 41-62. http://doi.org/10.21315/aamjaf2017.13.12.


Refbacks

  • There are currently no refbacks.


 

 

 

 

   

 

Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.