Board Gender Diversity, Risk-taking and Performance : Evidence from Dual Banking Systems

This paper investigates whether and how differently performance of Islamic banks is affected when female directors sit in the board. We study a unique sample of 1,528 observations on 71 Islamic banks and 120 conventional banks operating in eleven Muslim countries over 2010-2017 period. We find that Islamic banks with more female directors have a lower credit risk and inefficiency relative to conventional banks. However, we find no significant relationship for other performance indicators such as net interest margin and profitability. Overall, the analysis shows that the performance of Islamic banks is not adversely affected by the appointment of females in the board. The results have implications for promotion of gender equality and inclusive corporate culture in countries with dual banking systems