Board gender diversity and environmental, social and

(1)

Board gender diversity and environmental, social and

corporate governance performance: evidence from

ASEAN banks

Hamdan Amer Al-Jaifi

Taylor ’ s Business School, Taylor ’ s University, Subang Jaya, Malaysia

Abstract

Purpose–This study examines the associations between board gender diversity and banks’environmental, social and corporate governance performance in the ASEAN context.

Design/methodology/approach–The study uses a sample of yearly observations for ASEAN banks over the period 2011–2016. Generalized method of moments (GMM) regression is used for the main models, and the findings are supported by other robustness tests, namely ordinary least squares (OLS) regression and panel models (fixed and random effect regression).

Findings –The findings imply that board gender diversity positively influences corporate governance performance, although it has no impact on the banks’environmental and social performance.

Research limitations/implications – This study offers insights to regulators, investors and bank managers concerning board diversity and its impact on environmental, social and corporate governance performance. The findings imply that having a specific percentage of female directors on the board positively influences corporate governance performance. However, the impact of gender diversity on environmental and social performance is not supported.

Originality/value–Few empirical studies have examined the impact of gender diversity on non-financial performance. This study contributes to the debate on the importance of gender diversity by providing empirical evidence for the impact of board gender diversity on three non-performance measures (environmental, social and corporate governance) for ASEAN banks, a topic not previously examined.

There is scant attention to it in ASEAN countries, which have unique characteristics, and there remains a gap in the literature regarding the impact of board diversity among banks in this region. The findings of the study are confirmed by several robustness tests.

KeywordsGender diversity, Environmental, Social, Corporate governance, Performance, Banks, ASEAN countries

Paper typeResearch paper

1. Introduction

Over the last 2 decades, board diversity has been a main concern of regulators and researchers. Governments worldwide have followed different strategies to increase diversity, particularly in terms of gender. Some governments have taken legislative action, others are imposing mandatory quotas or taking the path of moral persuasion, and several countries have introduced voluntary measures. Norway took the lead in February 2002, when legislation was introduced that publicly traded firms and state-owned enterprises should have 40% female representation on boards of directors. This quota was achieved by the middle of 2008. Many governments followed suit, although not all were able to meet their target. Spain, for example, announced in 2007 a 40% quota for all public listed firms with more than 250 employees, to be achieved by 2015, but less than half were successful in this.

Firms resisted complying with the required quota even though the Spanish government offered state contracts as incentives. In 2010 Iceland introduced a 40% quota for firms with more than 50 employees, and by 2013, all firms had complied and achieved the target. France introduced legislative quotas of 20 and 40% in 2011, to be achieved by 2014 and 2018

Board gender diversity and bank performance

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Received 11 December 2018 Revised 9 August 2019 3 April 2020 Accepted 10 May 2020

Asia-Pacific Journal of Business Administration