The Effect of Board Gender Diversity on The Performance of Commercial Banks: Evidence from Bangladesh

Abstract

In today’s corporate world, board diversity is a much-talked-about topic, and gender diversity is an important appearance of board diversity. Gender diversity refers to the existence of women on corporate boards of directors.  This paper aimed to analyze the effect of board gender diversity on the performance of commercial banks in Bangladesh for the period 2017-2022. This study uses an instrumental variables regression analysis to investigate the relationship between board gender diversity and commercial banks' performance in Bangladesh.  The results indicate that the inclusion of male and female directors is positively related to the financial performance of firms, as measured by the return on assets and the return on equity. Limited empirical studies have been conducted on the relationship between board gender diversity and commercial banks' financial performance in the emerging banking sector. Therefore, there is still no consensus regarding the link between board gender diversity and commercial banks' financial performance based on the mixed and sometimes inconsistent results in prior research. Therefore, this study extends the current literature in the context of Bangladesh, showing that a male and female board member can enhance the banks' financial performance.