governance, bank characteristics, and performance Discussion by - - PowerPoint PPT Presentation

Board Diversity in European Banks: The influence of corporate governance, bank characteristics, and performance

Discussion by Patrick Verwijmeren Erasmus School of Economics

Summary

 Research question: “we investigate

the impact of banking industry regulations, financial performance, and financial fragility on board diversity”

 Board diversity means gender

diversity

 Findings: “appointing additional

female directors may improve the financial performance of EU banks”

Overall

 Highly relevant topic  Part of a stream of new

literature

 Data: 65 listed European banks

• ver 2004-2012

 Countries with different levels of

female representation on boards

 Crisis and non-crisis periods

Comments: Contribution of this paper’s sample

 There are already many studies on

diversity, also for banks. Claimed advantages of this study:

 Does not include private banks

(smaller, less transparent)

 Focusing on more countries  What do we expect to be different

now?

 Does female behavior differ among

countries?

 Forced diversity versus preferred

diversity!

Comments: Having an opinion

 “Farrell and Hersch (2005) argue

that the over-representation of women with multiple directorships may imply a limited number of qualified candidates. We disagree with this argument, as we believe that women are generally as well qualified and as well educated as men.”

Comments: Findings

 “appointing additional female directors may

improve the financial performance of EU banks”

ROA ROA Tobin’s Q Tobin’s Q % Female

• 0.008
• 0.019
• 0.066
• 0.143

% Female squared 0.0001 0.001

Further discussion

 Governance and gender diversity:

 Complements or substitutes?  Sensitivity to outside pressure

 Risk-taking might be good in times

• f economic growth

Conclusion

 Very relevant topic  The paper definitely has

potential

 Improved discussions of

contribution and results would help the paper