82nd International Atlantic Economic Conference

October 13 - 16, 2016 | Washington, USA

Impact of board gender on bank performance and risk across Central and Eastern European banks

Friday, October 14, 2016: 9:00 AM
Alin Andries, Ph.D. , Alexandru Ioan Cuza University of Iasi, Iasi, Romania
Seyed Mehdian, Ph.D. , University of Michigan-Flint, School of Management, Flint, MI
Ovidiu Stoica, Ph.D. , Finance, Money and Public Administration, Alexandru Ioan Cuza University of Iasi, Iasi, Romania
Bank risk and performance are always among the hot topics in finance. This is even more valid nowadays, after the financial crisis.

In this paper, we seek to identify the impact of the presence of women on bank boards on the banks' business model, performance and risk outcome. We put an emphasis on identifying features of the board structure that could have increased the performance and lowered the losses of banks.

We analyze the gender diversity of bank boards using a panel regression model that employs data for 156 commercial banks from 17 countries of Central and Eastern Europe (CEE) (Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Macedonia, Montenegro, Poland, Romania, Serbia, Slovakia, Slovenia and Ukraine) for the 2005 – 2012 period. As a starting point for our sample, we use all commercial banks from CEE countries available in the BankScope database in 2012.

To make sure that there is consistency across the sample, we restricted the investigation to the commercial banking sector. We collect the data for a total of 462 active banks from 17 CEE countries for the 2005–2012 period. Out of the 462 banks, only 260 banks have detailed information for at least 5 years.

Due to limited availability of corporate governance data for banks from CEE countries in commercial governance databases, we hand-collect information on various aspects of the organizational structure of the supervisory board at each bank each year from the banks’ annual reports, financial statements, capital adequacy and risk management reports and websites. Complete data is available for 156 banks, 39 domestic banks and 117 foreign banks, which accounted for 82.31% of the total assets of the CEE banking systems in 2012.