Gender diversity, board monitoring and bank efficiency in ASEAN-5

We examine the effect of gender diversity and board monitoring (board size and independence) on bank efficiency. Using a broad panel of ASEAN-5 listed commercial banks over the period 1999-2012, we observe that gender diversity in bank board decreases cost and profit efficiency. This finding confirm...

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Main Authors:	Ramly, Zulkufly, Chan, Sok Gee, Mustapha, Mohd Zulkhairi, Sapiei, Noor Sharoja
Format:	Article
Language:	English
Published:	2015
Subjects:	HG1501 Banking
Online Access:	http://irep.iium.edu.my/44732/ http://irep.iium.edu.my/44732/ http://irep.iium.edu.my/44732/1/SEAJBEL_VOL_7_%28AUGUST_2015%29_ISSUE_1.pdf

id	iium-44732
recordtype	eprints
spelling	iium-447322017-11-02T08:31:49Z http://irep.iium.edu.my/44732/ Gender diversity, board monitoring and bank efficiency in ASEAN-5 Ramly, Zulkufly Chan, Sok Gee Mustapha, Mohd Zulkhairi Sapiei, Noor Sharoja HG1501 Banking We examine the effect of gender diversity and board monitoring (board size and independence) on bank efficiency. Using a broad panel of ASEAN-5 listed commercial banks over the period 1999-2012, we observe that gender diversity in bank board decreases cost and profit efficiency. This finding confirms our concern that the appointment of female directors in bank board is merely to comply with regulatory requirement and the market for high performing women directors could be limited, particularly in the banking sector. Our result also shows that board independence increases bank efficiency, suggesting that higher ratio of independent directors is related to the board ability to monitor and advise management; thus improving efficiency. However, we find that board independence confounded the negative effect of gender diversity on bank efficiency. This finding suggests that the inclusion of women independent directors in bank board fails to mitigate the negative effect of gender diversity on bank efficiency. Alternatively, the positive effect of an independent director towards monitoring and advisory roles of the board weakens if the director is a woman. Further, we find a U-shaped relation between board size and bank efficiency. Banks exhibit decreasing return to scale with small board size, and when the board size multiply the banks started to have better efficiency level. Our result casts doubt on most extant literature that asserts that one board size (either small or large) is always the way to go for all organizations. 2015-08 Article PeerReviewed application/pdf en http://irep.iium.edu.my/44732/1/SEAJBEL_VOL_7_%28AUGUST_2015%29_ISSUE_1.pdf Ramly, Zulkufly and Chan, Sok Gee and Mustapha, Mohd Zulkhairi and Sapiei, Noor Sharoja (2015) Gender diversity, board monitoring and bank efficiency in ASEAN-5. South East Asia Journal of Contemporary Business, Economics and Law, 7 (1). pp. 9-21. ISSN ISSN 2289-1560 http://seajbel.com/
repository_type	Digital Repository
institution_category	Local University
institution	International Islamic University Malaysia
building	IIUM Repository
collection	Online Access
language	English
topic	HG1501 Banking
spellingShingle	HG1501 Banking Ramly, Zulkufly Chan, Sok Gee Mustapha, Mohd Zulkhairi Sapiei, Noor Sharoja Gender diversity, board monitoring and bank efficiency in ASEAN-5
description	We examine the effect of gender diversity and board monitoring (board size and independence) on bank efficiency. Using a broad panel of ASEAN-5 listed commercial banks over the period 1999-2012, we observe that gender diversity in bank board decreases cost and profit efficiency. This finding confirms our concern that the appointment of female directors in bank board is merely to comply with regulatory requirement and the market for high performing women directors could be limited, particularly in the banking sector. Our result also shows that board independence increases bank efficiency, suggesting that higher ratio of independent directors is related to the board ability to monitor and advise management; thus improving efficiency. However, we find that board independence confounded the negative effect of gender diversity on bank efficiency. This finding suggests that the inclusion of women independent directors in bank board fails to mitigate the negative effect of gender diversity on bank efficiency. Alternatively, the positive effect of an independent director towards monitoring and advisory roles of the board weakens if the director is a woman. Further, we find a U-shaped relation between board size and bank efficiency. Banks exhibit decreasing return to scale with small board size, and when the board size multiply the banks started to have better efficiency level. Our result casts doubt on most extant literature that asserts that one board size (either small or large) is always the way to go for all organizations.
format	Article
author	Ramly, Zulkufly Chan, Sok Gee Mustapha, Mohd Zulkhairi Sapiei, Noor Sharoja
author_facet	Ramly, Zulkufly Chan, Sok Gee Mustapha, Mohd Zulkhairi Sapiei, Noor Sharoja
author_sort	Ramly, Zulkufly
title	Gender diversity, board monitoring and bank efficiency in ASEAN-5
title_short	Gender diversity, board monitoring and bank efficiency in ASEAN-5
title_full	Gender diversity, board monitoring and bank efficiency in ASEAN-5
title_fullStr	Gender diversity, board monitoring and bank efficiency in ASEAN-5
title_full_unstemmed	Gender diversity, board monitoring and bank efficiency in ASEAN-5
title_sort	gender diversity, board monitoring and bank efficiency in asean-5
publishDate	2015
url	http://irep.iium.edu.my/44732/ http://irep.iium.edu.my/44732/ http://irep.iium.edu.my/44732/1/SEAJBEL_VOL_7_%28AUGUST_2015%29_ISSUE_1.pdf
first_indexed	2023-09-18T21:03:34Z
last_indexed	2023-09-18T21:03:34Z
_version_	1777410784640368640

Gender diversity, board monitoring and bank efficiency in ASEAN-5

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