Board of Directors’ Networks, Gender, and Firm Performance in a Male-Dominated Industry: Evidence from U.S. Banking

Owen, Ann and Temesvary, Judit and Wei, Andrew (2023): Board of Directors’ Networks, Gender, and Firm Performance in a Male-Dominated Industry: Evidence from U.S. Banking.

Abstract

Leadership roles in banking remain dominated by men; only about one in six bank board members is female. Connections among board members can improve firm performance, but women on boards are much less connected than men. In this paper, we study how gender relates to the role of connections: how do connected female versus male board members affect banks’ performance? Using IV techniques to account for the endogeneity of connections, we find that (1) better connected female (but not male) board members improve bank profitability and reduce earnings management; (2) connections of women on important board committees also improve performance – especially when the share of women on the board is relatively high (above the median).

• Item Type: MPRA Paper
• Language: English
• Keywords: bank boards; professional networks; gender diversity; instrumental variables
• Subjects: G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks ; Depository Institutions ; Micro Finance Institutions ; Mortgages; G - Financial Economics > G3 - Corporate Finance and Governance > G34 - Mergers ; Acquisitions ; Restructuring ; Corporate Governance; J - Labor and Demographic Economics > J1 - Demographic Economics > J16 - Economics of Gender ; Non-labor Discrimination

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