The Impact of Board Gender on Bank Performance and Risk in Emerging Markets

This paper investigates the impact of board diversity on the performance and risk of banks. We put an emphasis on identifying features of the board structure that could increase performance and lower the possible losses of banks. Using a unique, hand-collected dataset of 156 banks from Central and Eastern Europe during 2005-2012, we assess whether banks with more female directors or chairwomen display lower risk and higher performance. The analysis first shows that banks with a chairwoman and a higher proportion of women among the members of a bank's board record a higher level of profitability and tend to have a lower level of credit losses. Additionally, the results suggest that the higher proportion of women among members of the bank's boards, on average, the higher the bank stability during the financial crisis. Our results also reveal that the regulatory framework in the host-country affects the relationship between board gender diversity and bank performance and risk