Board Gender Diversity and Banks’ Performance in Africa

Abstract

Purpose – This paper aims to examine whether gender diversity on boards of directors is associated to bank performance.

Methodology – This paper relies on a comprehensive sample of banks operating in the West African Economic and Monetary Union (WAEMU)

Results/findings – The study finds a negative and significant association between these variables, which is robust to a large set of sensitivity analyses and persists over several years. The negative effect is concentrated in firms that need more of an “advisory” board relative to a “monitoring” board, since women appear to be more monitoring oriented.

Limitations/Implications – Policies aimed at fostering greater gender diversity on boards can of course have beneficial aspects; however, arguments that these policies will improve company performance must be made with great caution.

Originality – Given that previous literature has generally provided mixed conclusions on the effect of board gender diversity on performance, our article provides evidence relevant to the public and academic debate about the use of gender diversity policies in corporate governance codes.