Bank

Journal of Management and Governance (2022) 26:1213–1244
https://doi.org/10.1007/s10997-021-09594-6
Women’s leadership impact on risks and financial

performance in banking: evidence from the Southeast
Asian Countries
Ahmed Bouteska1 · Mehdi Mili2
Accepted: 21 July 2021 / Published online: 2 August 2021

© The Author(s), under exclusive licence to Springer Science+Business Media, LLC, part of Springer Nature
2021
Abstract
In this article we investigate the effect of the presence of women on the board of
directors and in executive positions on the risk and profitability of75 banks in ten
ASEAN countries during the period of 2002–2018.We find that banks with more
women in executive positions show higher capital risk, i.e., Z-score and capital
ratio. However, the women-led banks have higher market to book ratios and they are
more profitable in terms of return on assets (ROA) and return on equity (ROE). Fur-
thermore, our findings shed light on the relationship between gender diversity and
financial decision-making in the company by highlighting that the Southeast Asian
Nations (ASEAN) banks with more executives’ women are more risky and have
higher profits than the men-led banks. We also find that the proportion of women on
the board standing as a director or a chair reduces performance in ROA and ROE.
Bank performance measured by market-to-book (PB), is the lowest when there are
females on the board. This highlights the gender differences in investment behavior
and the women’s needs in banks at Asian region. Given that bank performance has a
direct effect on the stability of the financial system as well as on economic growth in
the country, it is essential for the regulatory authorities to assess variety of sources
which can improve performance and governance in (ASEAN) banks.
Keywords Corporate governance · Women leadership · Board gender diversity ·

Risk and financial performance · ASEAN Banking
JEL classification G01 · G21 · G30 · M14
* Ahmed Bouteska
ahmedcbouteska@gmail.com
Mehdi Mili
milimehdi@gmail.com
1
Faculty of Economics and Management of Tunis, Tunis El Manar University, Tunis, Tunisia
2
Department of Economics and Finance, College of Business Administration, University
of Bahrain, Zallaq, Bahrain
13
Vol.:(0123456789)
1214 A. Bouteska, M. Mili
1 Introduction
This paper proposes to study if gender diversity in business leadership and board
positions improve company performance. We discuss the relationship between the
financial performance of banks in ASEAN and the proportion of female in the board
of directors and occupying top executive positions. The motivations for the current
study arise from the case that women directors are under-represented since roughly
40% of the world labor force are females,1 but less than 20% of the Fortune 1000
companies’ board positions were held by women in 2015,2 and only 5.4% of the
CEO positions of Fortune 500 companies were occupied by females in 2017. Thus,
it is important to analyze if the banks with seldom women in executive and direc-
tor functions differ from men-led banks. The literature on corporate governance has
extensively addressed the notion of gender-based behavioral differences. Bernardi
et al. (2006) and Bear et al. (2010) associate women in leadership to higher social
responsibility standards and better corporate reputation, while Palvia et al. (2015)
link it to the level of risk tolerance of women. The impact of gender diversity on
profits and market value remains quite difficult and controversial. Reinert et al.
(2016) find positive correlations between gender diversity and market valuation. The
gap in the literature is that most of these studies had been conducted on the US mar-
ket or other well developed countries (e.g. Europe, UK, Australia and china…). The
absence of a rigorous study in the Southeast Asian Nations (ASEAN) is our main
motivation to examine the effect of women leadership on their bank performance.
Since the Southeast Asian culture in business differs from American and European
firms, where most of the banking research focuses on, it is especially of interest to
investigate the corporate governance in (ASEAN) financial institutions.
ASEAN is currently one of the most dynamic regions in the world. Women’s eco-
nomic participation in the region has increased, evidenced by the fact that more and
more women are graduating from university and entering the workforce. However,
leadership at the apex of banks still lacks gender diversity. Across the ten ASEAN
countries included in our study, we notice considerable variations in both board gen-
der diversity and executive gender diversity in banks. Substantive change in ASEAN
firm boards and executive positions can be difficult to achieve, as males dominate
societal culture in the region and entrenched stereotypes against women, who are
often perceived as subordinates rather than leaders. One of the reasons for the chal-
lenge is due to gender discrimination (Doldor et al., 2012) where women are per-
ceived as weaker leaders than their male counterparts. Other reasons are high turno-
ver and absenteeism (Cox & Blake, 1991) and women are less likely to pursue high
profile careers than men due to their family commitment (Goldin & Katz, 2008).
Hence, ASEAN firms are aware that appointing women directors will affect their
performance adversely.
This gender diversity issue is highly relevant to the banking industry in which the
objective of corporate governance is not only limited to maximizing shareholders’
1
World bank: https://data.worldbank.org/indicator/SL.TLF.TOTL.FE.ZS?name_desc=true.
2
The link: https://www.2020wob.com/sites/default/files/2020GDI-2015Report.pdf.
13
Women’s leadership impact on risks and financial performance… 1215
wealth and welfare but also to ensure the overall safety and soundness of the bank-
ing system. In particular, bank board composition is accountable to protect the inter-
est of a wide range of stakeholders such as depositors, borrowers, clients, other
banks and regulators (Ciancanelli & Reyes-Gonzalez, 2000; Pathan et al., 2007). In
the ASEAN banking industry, failure of the board of directors has serious repercus-
sions because it impedes the banking system and could potentially lead to financial
turmoil and recessions (Claessens & Yurtoglu, 2013). Theoretical argument sup-
ports higher participation of women in corporate boardrooms and executive posi-
tions (Bantel & Jackson, 1989; Campbell & Mínguez-Vera, 2008; Carter et al.,
2003), and the benefits may be realized if increasing such participation is largely
motivated by the of regulation defending more gender equality. In this due, financial
institutions, mainly banks, are especially concerned with corporate governance and
taking into account these governance variables, risk and performance measurements
may make other answers to the issues raised and can enlighten advantage of the
specificities of banking governance in Southeast Asian Countries. It is, therefore,
an interesting search path. This research is unique not only in its breadth of ASEAN
countries coverage accordingly their regional characteristics and different business
culture but also in its effort to examine whether more women in different roles such
as board directors, and senior management are linked to better bank performance.
Given the importance of banks in the economy, it is crucial to understand if banks
benefit when they employ more women at the top management positions and when
more women take charge in the banking boardroom for East Asia.
There is also a great concern for this topic because societal gender differences in
human capital may influence investors’ evaluations of the future earning potential
of banks that have more female directors and executives at the highest levels in the
ASEAN region. Furthermore, the ASEAN banking sector corporate governance is
interesting to be studied due to of the weakness of the regulatory framework and
the global risk interconnection among financial institutions in most countries of the
region. Significant episodes of systemic banking crises have taken place in Asia over
the last two decades have been considered more costly and very damaging for devel-
oping areas than for industrial economies. As a result, Arena (2008) confirms that
the priority for policy makers has become the prevention of such recurrent episodes.
The financial systems in ASEAN countries are strongly bank-based and the security
markets tend to be rather small and illiquid. According to Singh (2005), commercial
banks dominate the financial intermediation in most developing countries around
the world because the banks there have an advantage in processing information and
in risk diversification. In most ASEAN countries, the sensitive political environment
and the limitation of access to credit have resulted in strong economic instability.
Banks of the region enjoyed high interest margins and, the increase in interest rates
increased financing costs which consequently increased loan default rates.
To better take into account the role of banks in the region and their specifici-
ties in generating their income, it is essential to study the main factors that affect
their whole financial performance. Board gender diversity and executive positions
has been suggested in the literature to affect bank performance. We also support the
advancements of Levine (2004) that banks have special characteristics and present
higher opaqueness, heavy regulation, and intervention by the government. Similarly,
13
we should take into account, the differences in corporate governance mechanisms

between banks and non-bank financial institutions (Adams & Mehran, 2003). Due to
the fact that the great majority of the existing research in support of our preposition
related to female leadership focuses only in the United States, Women leadership or
board gender diversity would be a very of particular interest in the context of emerg-
ing countries.
While it contributes to the extant literature, to the best of our knowledge, our
paper is the first that questions the relationship between board gender diversity,
women leadership and bank performance by examining banks from 10 ASEAN
countries. Specifically, this study attempts to answer the following questions: First,
is the gender diversity matter for performance and risk in ASEAN banks? Second,
given the skill and preference differences between men and women in decision mak-
ing and advising, are appointing more women in bank boards is considered as a cru-
cial corporate governance device which bring out the benefits in terms of risk and
performance in the banking industry. Third, are women effective on their monitor-
ing and implementing roles in leadership executive positions that further enhance
banks’ economic performance and ultimately increase risk-taking to strong produc-
tivity growth? Finally, what is the impact of increased female representation for gen-
der balance on a bank’s financial results and success in Southeastern Asia?
To answer these questions, we use a sample of 75 individual banks in the ASEAN
region over the period 2002–2018. The study examines the impact of the presence
of women as executives and as board members on banks’ risk and return. We find
somewhat surprising results. First, banks with more women executives are more
likely to underperform in terms of Z-score and Capital ratios; although; they are
more likely to have higher Price to book, ROA and ROE ratios. Second, we show
that women in executive in positions in ASEAN countries are more risk conserva-
tive or risk avoiding than men in executive positions in contradiction with the litera-
ture focused on developed countries. We also check the effect of other governance,
bank-specific, regulation-related, and macroeconomic variables. Our findings show
that Board size increases return on equity and Z-scores. Capital ratios increase the
Z-score of banks, while reducing Price-to-book ratios. The opposite effect is shown
in Asset Growth ratios which seem to increase Price-to-book ratios, but reduce
Z-score ratios. We provide, finally, recommendations for banks being committed to
having women represented on their boards and in leadership positions.
Our findings have important implications for practitioners, policymakers as well
as to regulatory authorities. First, previous researches results based on European
or U.S. empirical data are not necessarily applicable to Southeast Asian countries
because of differences in cultures, demographics, and economic development. Thus,
our study based on Southeast Asian data could inform more effective policies and
provide more practical guidance for Southeast Asian corporations and economies
than references based on foreign experiences. Second, Women in banking boards
and in top management positions can make banks more profitable and can also
improve risk management. In this vein, the paper recommends to accelerate the pace
of change in the ASEAN banking industry. Banking authorities can introduce poli-
cies, providing women with opportunities to rise to senior leadership roles through
setting quotas and corporate governance standards, creating mentorship programs
13
for younger female executives to connect with more senior leaders including male
managers within and outside the bank, offering targeted training workshops for
future female leaders preparing them to sit on boards and take up senior manager
positions. Shareholders can also play a catalytic role by encouraging their banks
they invest in to have more diverse boardrooms and asking them to disclose their
diversity policies and measures for signaling its commitment to this important mat-
ter. Finally, our findings generate clear and strong recommendations for government
policies on gender diversity in corporate leadership. On the one hand, arbitrary quo-
tas of female representation in leadership with economic justification may produce
a lot in terms of future financial performance. On the other hand, government poli-
cies that aim to improve female leadership through improving the gender equality in
society will be well rewarded in capitalizing on human talents.
The rest of the paper is organized as follows. In Sect. 2 we present the litera-
ture review on gender diversity and bank performance and we develop the research
hypotheses. Section 3 describes the methodology used and descriptive statistics.
Section 4 presents the main empirical results. The last section concludes.
2 Background and hypotheses
2.1 Women leadership and performance
When analyzing gender-based differences and firm performance, we find that a large
body of literature focuses on non-financial firms. Conflicting results were found by
Adams and Ferreira (2009) and Liu et al. (2014) when studying the relationship
between board gender of non-financial companies and their performance. Focusing
on US firms, Adams and Ferreira (2009) show that the presence of women on the
board of directors improve the corporate governance, but the board gender diversity
has negative impact on firm value and its performance, because the gender diver-
sity decreases Tobin’s Q and return on assets (ROA) of firms. Using a sample com-
posed of Chinese listed firms, Liu et al. (2014) suggest that board gender diversity
has positive impact on firm performance. According to their findings, they wrote
that boards with at least three women directors have a more significant effect on
return on assets (ROA) and return on sales (ROS) compared to boards containing
one or two women. In line with Liu et al. (2014), by analyzing a sample of Ger-
man firms, Joecks et al. (2013) find a U-shaped relation between gender diversity
and firm performance. They further document that a threshold 30% of women in
the board of director insure a positive effect on firm profitability. Adams and Fer-
reira (2009) point out that female directors have better attendance records than
male directors. Interestingly, male directors’ attendance records improve when the
board is more gender diverse). A Chinese study (Liu et al., 2014) also found that
female board members were not only stricter with corporate governance but were
also more risk averse. Higher participation of women directors in bank boardrooms
adds to the diversity of opinions, knowledge, perspective and approach to problem
solving, which enhances the quality of decision making and formulation of strategy
(Westphal & Milton, 2000) as well as monitoring role of the board (Campbell &
13
Mínguez-Vera, 2008; Lucas-Pérez et al., 2014).Having women as independent direc-

tors indicates better monitoring process since the board of directors may be better
able to resist the influence of the top executives in its decision and to restraint them
from misusing their power. Women may serve better as independent directors on
board because of their nature such as more thorough and complete in their thinking
process, persistent in addressing problems, more sensitive to changes in the busi-
ness environment, more benevolent as well as more committed and involved, more
diligent and less self-interest oriented than their male counterparts, which will con-
tribute to wider perspective in decision making of firms and thus their performance
(Cox & Blake, 1991; Carter et al., 2003; Hillman et al., 2002; Nielsen & Huse, 2010;
Adams & Ferreira, 2009; Adams & Funk, 2012; Darmadi, 2013; Liao et al., 2014;
Lucas-Pérez et al., 2014). Women on boards also excel in interactions with human
which helps companies in retaining and expanding human resources and improving
relationships with institutional investors, clients and other stakeholders (Jean et al.,
2014). This inevitably contributes to long-term relation building among the employ-
ees, clients and stakeholders that lead us to better growth prospect and performance
of the companies.
Recent researches are more focusing on the individual executives than corporate
boards, and a significant relation between women executives and firm performance
has been shown. Perryman et al. (2016) note the existence of opposed results when
analyzing the CEO gender and the financial performance of non-financial firms.
Mersland and Strom (2009) analyze a sample of 278 microfinance institutions from
60 countries to examine the influence of the structure of the board directors and
CEO features on the performance of financial firms. They discover a significant and
positive relationship between economic profitability and operational self-sufficiency
and women CEOs. Likewise, Strom et al. (2014) argue that women in executive
positions and the portion of women in the board of directors are positively associ-
ated with the financial profitability of microfinance institutions. Based on an a large
sample of non-financial companies covering the period 1992–2012, Perryman et al.
(2016) investigate the influence of the presence of women CEOs on company risk
and performance and report that companies with more female on their top manage-
ment teams display greater Tobin’s Q ratios even though executives’ women are paid
usually less paid than men executives for doing the same or broadly similar job.
However, Kolev (2012) indicates that, in terms of shareholder returns, men CEOs
outperform their woman counterparts. Moreover, while Lam et al. (2013) recognize
that men executives receive much more favorable compensation than women CEOs.
They didn’t find any association between CEO gender and performance.
Recent researches on the relation between women executives and firms’ level
of risks raised almost similar results (Huang & Kisgen, 2013, and Perryman et al.,
2016). Using a sample of non-financial US companies, Khan and Vieito (2013)
demonstrate that companies with women CEOs show lower levels of risk, as meas-
ured by the standard deviation of the stock returns. In the same line, Barber and
Odean 13 (2000) find evidence that men executives are more overconfident than
their women, and they are more committed to take risk by increasing the debt of the
firm. Perryman et al. (2016) found that companies with higher proportions of female
CEOs reduce betas and standard deviations of stock returns. Only few researches
13
had focused on the possible impacts of women leadership on risk and performance
in banks. Amore and Garofalo (2016) examine a large sample of US banks and show
that women executives increase banks’ capitalization. Additionally, they argue that,
in less competitive markets, women leaders achieve lower risk and lower return on
assets (ROA). Based on a sample of 264 banks from Luxembourg, Reinert et al.
(2016) show that women management affect positively firm performance measured
by return on equity (ROE) mainly during crisis periods. Further, they observe that
the relation is nonlinear and that banks holding 20–40% of women CEOs appear to
be more efficient than Men CEOs. Andries et al. (2017) suggest that the banks which
have a chairwoman and diversified boards are more likely to have better profitability,
also, the latter show higher stability levels in the last financial crisis 2007–2008.
Consistent with this idea, Dong et al. (2017) focus on a number of banks for China
and prove that the number women in the board of directors is related to higher profit
and less level of risk. In contrast, as indicated by Farag and Mallin (2017), who
examine the impact of women directors on the European banks performance, the
women executives are not risk averse. The authors suggest that women directors’
behavior may change depending on their executive function and women and men
executives demonstrate similar risk-taking behaviors when having similar positions
in the banking sector.
2.2 Women leadership and performance with ASEAN context
In this paper we focus on the ASEAN banking sector where most economies show
a high concentration and strict government control in banking sector. However, by
the early 1990s, the bank ownership has experienced a liberalization process which
increased the competitiveness of the banking sectors and reduced the government
ownership. The composition ASEAN banks’ assets had been changed widely and
an international foreign capital flowed into the ASEAN countries banking sectors.
Limited number of researches had focused on the impact of gender based differences
and performance in the ASEAN region (Abdullah et al., 2016; Liu et al., 2014; Low
et al., 2015; Nguyen et al., 2015). Contrarily, to most of the developed economies, in
which the existing corporate governance literature has mainly focused, the ASEAN
context is mainly dominated by family ownership and a very weak legal framework.
By focusing on Chinese firms, China, Liu et al. (2014) show a significantly posi-
tive relationship between the diversified structure of the board of directors and the
performance of the firm, but they do not find any evidence for this relationship in
the case of state-owned firms. Nguyen et al. (2015) analyzed a large sample of com-
panies from Vietnam and they show that a percentage of women in the board of
directors exceeding 20% increase the firm performance. By examining a sample of
Asian countries including Hong Kong, South Korea, Malaysia, and Singapore, Low
et al. (2015) argue that the presence of women on the board of directors improve the
whole performance of the company.
Abdullah et al. (2016) analyze the relationship between firm performance and
boards’ structure using a sample of Malaysian firms. Their results show that board
13
gender diversity have positive impact on firms’ market performance. Based on the
above advances, our first hypothesis is:
H1 There is a negative association between board gender diversity and the bank’s
risks.
The literature on the impact of gender differences in top management team and
bank performance still need to be investigated. Because the appointment of women
to boards of directors is relatively new in developing economies, no previous
research works had linked the profitability and risk of banks in the region to the gen-
der diversity of their executive teams or their board of directors. The literature has
previously distinguished gender based behavioral differences which may influence
corporate decisions. Besides Farag and Mallin (2017), who found no differences in
terms of risk-taking between women and men executives, the scarce literature relat-
ing gender diverse boards or executive positions and risk-taking mostly agree on the
higher risk aversion attributed to women. Some studies (Palvia et al., 2014; Dong
et al., 2017) focus on financial institutions and show that women are more conserv-
ative in their management behavior. Results found about the relationship between
gender diversity and bank performance are inconclusive. The works of Reinert et al.
(2016) and Dong et al. (2017) show a positive relationship between gender diver-
sity and performance, and Amore and Garofalo (2016) find higher financial perfor-
mance of women executives than men executives in terms of return on assets (ROA)
under low competition scenarios. But, on the contrary, female underperform male
top executives in highly competitive scenarios.
As underlined hereafter, the literature shows higher profitability and lower levels
of risk in companies with more women executives and appointed in their board of
directors. In the light of the above review, our second hypothesis is:
H2 There is a negative association between top management diversity and the

bank’s risks.
3 Data and methodology
3.1 Sample
Our study is conducted on financial institutions from 10 ASEAN countries (Brunei,

Cambodia, Myanmar, Laos, Indonesia, Malaysia, the Philippines, Thailand, Singa-
pore, and Vietnam), with annual observations over the period (2002–2018) classified
using the commercial bank classification for (80%) of the sample firms. Selecting
banks with large total asset should help us to better test our hypotheses. Our sample
includes the largest financial institutions in ASEAN. Our sample is collected from
various sources. The data used to measure bank specific variables are obtained from
Bureau van Dijk’s Bankscope database and hand collected from annual reports. We
build some variables with our own calculation. BankScope provides information on
13
Table 1 Sample composition Country Observations Percent
Vietnam 100 7.98

Brunei 25 2
Indonesia 323 25.78
Thailand 132 10.53
Singapore 120 9.58
Myanmar 79 6.3
Cambodia 69 5.51
Laos 62 4.95
Malaysia 223 17.8
Philippines 120 9.58
Total 1253 100
This table reports the sample by country
the board of director gender diversity as well as the board members of banks. We
examine the board members names to find the gender composition of the board and
management team and to find the total number of female directors on the board. In
total our final sample consists of 1253 bank-observations on 75 banks between 2002
and 2018 (see Table 1 which introduces the number of observations per country).
The table shows that Indonesia has the largest number of financial institutions in our
sample is (25.8% of total observations). Malaysia and Thailand represent important
part of our sample with 17.8%and 10.53%of total observations, respectively. Brunei
is the smallest market of the sample with 25 bank observations only.
3.2 Variables
In line with Lee et al. (2014), we use three alternative dependent variables to evalu-
ate the bank performance in our study, two accounting-based performance meas-
ures: return on assets (ROA) and return on equity (ROE), and one market-based
performance measure, market-to-book (M/B). We use two alternative measures to
evaluate bank risk: Z-score (Z) and the ratio of equity over total assets of bank (EA).
3.3 Measure of bank risk
Following Baselga-Pascual et al. (2015), the z-score remains an approximation of

the indicator reflecting the distance to default (DD) of a bank. It is the measure, in
number of standard deviations, of the fall in the bank rate of return resulting in a
complete absorption of equity. Thus, the higher the value of the z-score the lower is
the risk of failure of the bank. Conversely, the rapprochement of the z-score to the
value of the standard deviation of the return on assets is an indication of a high prob-
ability of default for the bank (Lee et al., 2014). Z-score has been adopted widely
in the literature (e.g., Laeven & Levine, 2009; Demirgüç-Kunt, & Huizinga, 2010;
13
Köhler, 2015; Chiaramonte et al., 2015) as a measure of risk of banks. Z-score (Z)
is given by:
ROAi,t + EAi,t
( )
Zi,t = LN (1)
𝜎(ROA)i,t
With ROA represents the return on assets, EA denotes the ratio of equity to
assets, and σ(ROA) is the standard deviation of return on assets. We consider natural
logs to reduce the exhibited skewness of the original variable Z-score (Z). We rely
on the proposition of Furlong and Keeley (1989) and Gennotte and Pyle (1991) that
low capital ratios is an appropriate indicator of solvency risk and the bank’s ratio of
equity to assets (EA) could be used as alternative measure to bank risk.
3.4 Measure of bank performance
To assess bank profitability, we use the two common indicators: the return on assets
(ROA) and the return on equity (ROE). Return on assets (ROA) is a measure the
bank managerial efficiency (Baselga-Pascual et al., 2015). The ROE is a measure
of the financial performance of banks (Trujillo-Ponce, 2013). To measure the mar-
ket performance of the bank, we use the market-to-book ratio (Price-to-book) (PB),
which is commonly employed in previous works to measure profitability (Hunter &
Wall, 1989) and corporate value creation.
3.5 Measure of gender diversity and set of corporate governance indicators
We focus on four main variables of interest to test whether appointing women in

top positions (board or executive) affect the performance of financial institutions
in ASEAN. We gather manually data gender diversity for more than 97 ASEAN
financial institutions: the gender of the CEO and chairperson of each bank, the per-
centage of women in the bank boards and the percentage of women in top manage-
ment and executive positions (senior management at boards). Table 2 indicates that
women are still underrepresented in the so-called ASEAN banks. For all countries
across the sample, there are neither women CEOs nor women chairing boards and
only 10% of the board of directors are women. In some of the countries there are no
diversity in the board of directors, such as in Singapore and Myanmar (with 120 and
79 bank observations, respectively). Women’s underrepresentation have been widely
documented in boardroom positions around the world, but the women representa-
tion in ASEAN bank continue to lack even the level of well-developed countries.
Several authors, such as Torchia et al. (2011) and Flabbi et al. (2016), support that
applying a critical mass of female on corporate board is mandatory to get benefit
from gender diversity. The absence of women as top executives and Chair persons
reduce appropriate gender indicators to the percentage of women executives and the
percentage of women board members. The percentage of women CEOs is meas-
ured by two different indicators: women executive, denoted as the proportion of
female holding an executive position, and the managerial gender diversity, which is
13
Table 2 Summary statistics of bank-level gender variables (female representation)
Country Women Board (%) Gender Diverse Women Board > 1 Women CEO Women Chair Women Executive(%) Managerial Gender
Board (dummy) Diversity (dummy)
Vietnam 3.90 (4.40) 0.48 (0.51) 0.00 (0.20) 0.00 (0.00) 0.20 (0.40) 15.00 (5.80) 0.73 (0.46)
Brunei 9.90 (11.80) 0.47 (0.51) 0.10 (0.20) 0.10 (0.20) 0.10 (0.30) 28.1 (8.80) 1.00 (0.00)
Indonesia 6.70 (9.30) 0.45 (0.50) 0.10 (0.30) 0.00 (0.00) 0.00 (0.10) 15.00 (15.00) 0.33 (0.49)
Thailand 2.80 (5.50) 0.21 (0.41) 0.10 (0.20) 0.00 (0.00) 0.00 (0.00) 6.20 (5.80) 0.19 (0.39)
Singapore 0.80 (4.00) 0.04 (0.19) 0.00 (0.00) 0.00 (0.00) 0.00 (0.00) 15.40 (2.80) 0.73 (0.46)
Myanmar 0.00 (0.00) 0.00 (0.00) 0.00 (0.00) 0.00 (0.00) 0.00 (0.00) 23.60 (5.10) 1.00 (0.00)
Cambodia 7.40 (6.10) 0.66 (0.48) 0.40 (0.50) 0.00 (0.00) 0.00 (0.00) 5.90 (7.90) 0.30 (0.47)
Women’s leadership impact on risks and financial performance…
Laos 7.60 (5.70) 0.69 (0.47) 0.00 (0.20) 0.00 (0.00) 0.00 (0.00) 33.60 (20.10) 0.71 (0.47)
Malaysia 3.00 (6.30) 0.21 (0.41) 0.00 (0.20) 0.00 (0.00) 0.00 (0.00) 18.20 (13.90) 0.61 (0.49)
Philippines 1.20 (2.40) 0.22 (0.44) 0.00 (0.00) 0.00 (0.00) 0.00 (0.00) 12.90 (8.20) 0.50 (0.55)
Total 4.60 (7.40) 0.35 (0.48) 0.10 (0.30) 0.00 (0.00) 0.00 (0.10) 15.60 (13.50) 0.53 (0.50)
This table reports summary statistics for all gender variables used in model specifications. The table contains results (Mean, and Standard deviation) for all sample obser-
vations by country
1223
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a dummy variable that equals to 1 if the bank adopts above P50 (50% of estimates)
representing (12.5%) women executive members and 0 otherwise. The percentage
of women board members is measured also by two alternative variables: women
board, which is the proportion of woman acting as member of the board of direc-
tors, and the gender diverse board, which a dummy variable that equals to 1 if the
board has at least one woman director and 0 otherwise. In our analysis, we utilize:
board size as the natural log of number of board members, and large board, which is
a dummy variable taking the value of 1 if the bank adopts above P75 (75% of esti-
mates) representing (10 board members) board size and 0 otherwise. Larger boards
are frequently encountered in the literature (see, for example, Pathan, 2009; Adams
& Mehran, 2012) since they may perform better in monitoring financial institutions.
Board independence is measured by the percentage of board members who are inde-
pendent. Previous researches argue that independent directors are more efficient in
taking decision than dependent directors (see Yeh et al., 2011).Generally, these cor-
porate governance variables are commonly used by earlier researches and are shown
to improve the firm management quality and its financial performance. Therefore,
we predict that the corporate governance variables are positively related to bank
performance.
3.6 Measure of bank characteristics
To better isolate the impact of leadership and gender diversity on bank risk and
performance, we include bank size, bank asset structure and bank ratio of equity
to assets (if not included as a dependent variable in our regression) and bank asset
growth as control variables. We also control for the commercial and foreign status of
the banks. Salas and Saurina (2002) and Uhde and Heimeshoff (2009) among oth-
ers have studied the effect of size on banks’ performance. Salas and Saurina (2002)
argue that the risk can be diversified more effectively by larger banks that benefit
more from economies of scale, however, De Jonghe (2010) demonstrate that greater
banks may have higher risk. Bank size is measured by the natural logarithm of total
assets. The loans to assets ratio is a proper measure of the bank’s asset structure.
Männasoo and Mayes (2009) find a positive relationship between Loans to assets
ratio and increasing risk due to long-term bank poor management. The variable
Asset growth is calculated by the percentage of change in total assets between fiscal
years t-1 and t. We control for foreign banks by a dummy variable Foreign owner-
ship, which takes the value of 1 for foreign owned banks and 0 otherwise, as most
studies focused on ASEAN find a significant relationship between foreign bank pen-
etration and financial stability. Finally, we control for commercial banks with the
dummy variable Commercial, which takes the value of 1 if the examined company is
classified as a commercial bank and 0 otherwise.
3.7 Measure of macroeconomic conditions
Macroeconomic factors such as economic growth, unemployment, and the eco-

nomic freedom of a country, are shown in the literature to affect the performance of
13
banks and their efficiency. The high annual rates of growth have been documented
in earlier literature to be related with the stability of the economy and the distress of
banks in the country and higher efficiency ratios (Borio & Lowe, 2002; Poghosyan
& Cihak, 2011). In line with Duygan-Bump et al. (2015), we first employ two mac-
roeconomic variables: the annual growth rate of real GDP and the annual average
Unemployment rate. In our regressions we cannot use the inflation rate or the (GDP)
per capita as economic variables as some countries of our sample experiences
chronically low accuracy of macroeconomic statistics. The Financial Freedom and
the Freedom from Corruption indexes are introduce as further economic indicators
in the estimation. We employ the financial freedom as control variable in our analy-
sis, which is proxied by the Financial Freedom Index created by the Heritage Foun-
dation. The Economic Freedom Index was built using data on Financial Freedom
measure. The Economic Freedom Index, essentially depends on 10 quantitative and
qualitative measures of global economic freedom, grouped into four categories; (1)
Rule of Law; (2) Limited Government, (3) Regulatory Efficiency and (4) Open. The
Economic Freedom Index is an average of these components and it’s scaled from
0 to 100 (Heritage Foundation, 2016). We control the specifically Financial Free-
dom Index in our study because the sample is composed of financial institutions. A
higher value in this index indicates more financial freedom perceived in the country.
As a measure of corruption, we include the Corruption Freedom Index in our mod-
els because weak legal protection characterizes the business environment in ASEAN
region. These main indicators of financial freedom and corruption freedom are fre-
quently employed as independent variables which consider different features of bank
performance in prior works (Chortareas et al., 2013; Demirgüc-Kunt et al., 2004).
To assess the impact of women leadership on bank performance, and we believe it is
essential to control for the gender inequality in the ASEAN across countries,3 since
the gender inequality is on average higher than those of most developed countries.
In our regressions, we add to the baseline specification another control variable: the
gender inequality, which is proxied by the Gender Inequality Index (GII) ranging
between 0 and 1. Larger values of inequalities (INEQ) imply higher loss of basic
dimensions of human development.4
3.8 Measure of financial regulations and other control variables
To reduce banks’ risk, regulatory authorities require banks to maintain a high

amount of regulatory capital. Laeven and Levine (2009) point out that capital
3
8 countries from the 10 analyzed are considered as “Frontier and Emerging Asia”: Indonesia, Malay-
sia, the Philippines, Thailand, Vietnam, Cambodia, Laos, and Myanmar [International Monetary Fund
(IMF)].
4
According to the Human Development Reports of United Nations (2016): Reproductive health is prox-
ied by maternal mortality ratio (MMRatio) and adolescent fertility rates (births per 1000 women ages
15–19), Empowerment is proxied by percentage of parliamentary given to women and percentage of
adult women and men aged 25 years and above with at least some secondary education, Economic status
is measured as labor market participation and proxied by labor force participation rate of women and
men populations aged 15 years and above (http://hdr.undp.org/en/2016-report).
13
requirement reduce banks’ incentives to take risk, although risky behavior may still
persist (Barth et al., 2004). Moreover, capital regulations discourage banks to reduce
information asymmetry on investment projects, which reduce the quality of banks’
credit portfolios and increase the probability of bank default. In our regressions we
consider two aspects of regulatory strangeness; the restriction on banks’ activity mix
(Activity), and the authorities owned by supervisory agencies to intervene banks’
structure and operation (Supervisory power). The data for each ASEAN economy
is collected from the World Bank data Base and provided by Barth et al., (2001,
2004, 2008, 2013). As Demirgüç-Kunt et al. (2010) have argued, greater stringency
is associated with higher values of the selected indexes implying that the regulatory
authority has more power to exert strong control on banks and the transactions they
perform. Following the approach suggested by Delis and Staikouras (2011), we use
the first lag of the natural logarithm of these indices because regulatory measures do
not affect directly bank performance and bank risk. The full list of variable defini-
tions and data sources is reported in Table 3.
3.9 Summary statistics and pairwise correlations
Table 4 presents the descriptive statistics of all variables to be used in our regressions
(except bank-level gender variables). In average of the board size ranges from 9 to 10
members. Cambodia has the largest boards with 15 board members in average and
the smallest in Singapore, Myanmar and Brunei with boards of less than 7 members.
Board independence presents a mean of 47.81%. Regarding bank characteristics con-
trols, the biggest banks are from Thailand and Cambodia, and the smallest ones are
from Myanmar. The mean values of loans to total assets are highest for Thailand and
Laos. Cambodian banks have the highest ratio of equity to assets, while Thailand
banks have the lowest ratio. The asset growth ratios show high values in Indonesia
and the Philippines. In terms of macroeconomic conditions, the most gender equal
banks (INEQ index) are in Vietnam and Thailand; Brunei shows the highest gender
inequality index, INEQ. The mean GDP annual growth and unemployment ratios are
4% and 8%, respectively, which are typical rates for emerging economies. The score
of financial freedom is distributed with the mean value of 54.58. Financial freedom
is growing at the highest scores on average in Laos and Thailand (scoring 71.92 and
68.57, respectively). The countries like Philippines, Vietnam, and Myanmar have the
lowest financial freedom indices with 32.28, 37.34, and 43.94 respectively. In con-
trast, Thailand reports the best Corruption Freedom index (72.09) that receives nearly
twice as many points than the subsequent one, Laos (34.96). Based on this index, the
Philippines is the most corrupted country by a mean which equals to (22.42).
Table 5 reports the correlation matrix between the key variables to be used. The
table shows a negative and statistically significant correlation between the Z-score
and the Women board and Women executive. In line with most previous studies,
the Z-score is found to be significantly correlated with most of our capital and per-
formance variables and executive gender and board diversity variables. Similarly,
the Price-to-book (BP) variable is highly negatively correlated with Women board
(− 0.1215).Meanwhile, Women executive is positively and significantly correlated
13
Table 3 Definition of variables and data sources
Variable/Code Definition Sources
Z-score ( Zi,t) Natural logarithm of Z-score (%) Bankscope and authors’ own calculation
Equity/assets (EA) Ratio of equity to total assets (%) Bankscope and authors’ own calculation
Return on assets (ROA) Ratio of net income to total assets (%) Bankscope and authors’ own calculation
Return on equity (ROE) Ratio of net income to total equity (%) Bankscope and authors’ own calculation
Price to book (PB) Ratio of market value per share to Book value per share (%) Bankscope and authors’ own calculation
Women board (WB) Percentage of female over total board Positions (%) Computed by the author using the data from Bankscope, banks’
annual reports
Gender diverse board (GDB) Equals 1 if board has at least one female; 0 otherwise Computed by the author using the data from Bankscope, banks’
annual reports
Women executive (WE) Percentage of female over total executive Positions (%) Computed by the author using the data from Bankscope, banks’
annual reports
Managerial gender diversity (MGD) Equals 1 if female percentage is with above P50 in executive Computed by the author using the data from Bankscope, banks’
positions; 0 otherwise annual reports
Women board > 1 (WB > 1) Equals 1 if board has more than one female; 0 otherwise Computed by the author using the data from Bankscope, banks’
annual reports
Women CEO (WCEO) Equals 1 if bank has a female CEO; 0 otherwise Computed by the author using the data from Bankscope, banks’
annual reports
Women CHAIR (WCHAIR) Equals 1 if bank has a female Chair; 0 otherwise Computed by the author using the data from Bankscope, banks’
annual reports
Board size (BSIZE) Natural logarithm of number of board Members Computed by the author using the data from Bankscope, banks’
annual reports
Large board (LB) Equals 1 if board members is with above P75 in board; 0 Computed by the author using the data from Bankscope, banks’
otherwise annual reports
Board independence (BIND) Percentage of independent board Members (%) Computed by the author using the data from Bankscope, banks’
annual reports
Foreign bank (FB) Equals 1 if bank is ASEAN based foreign bank; 0 otherwise Computed by the author using the data from Bankscope, banks’
annual reports
1227
13
Table 3 (continued)
1228
Variable/Code Definition Sources
13
Commercial bank (CB) Equals 1 if bank is ASEAN based commercial bank; 0 otherwise Computed by the author using the data from Bankscope, banks’
annual reports
Loans/assets (LA) Ratio of loans to total assets (%) Bankscope and author s’ own calculation
Bank size (Size) Natural logarithm of total assets Bankscope and author s’ own calculation
Asset growth (AG) Real growth rate of total assets (%) Bankscope and author s’ own calculation
GDP growth (EG) Measured by real GDP growth rate (%) International Financial Statistics (IMF)
Unemployment (Unemp) Measured by unemployment rate (%) International Financial Statistics (IMF)
Gender inequality (INEQ) Measured by gender Inequality Index (GII) International Financial Statistics (IMF)
Financial freedom (FF) Measured by financial freedom index Heritage Foundation (HF)
Corruption freedom (CF) Measured by corruption freedom index Heritage Foundation (HF)
Activity (ACT) Measured by index of regulatory stringency on the activity mix Barth et al., (2001, 2004, 2008, 2013) and authors’ own calcula-
of banks tion, World Bank’s WDI
Supervisory power (SVP) Measured by index of the authority owned by supervisory Barth et al., (2001, 2004, 2008, 2013) and authors’ own calcula-
officials tion, World Bank’s WDI
This table describes all variables to be used in the regressions and their data sources
A. Bouteska, M. Mili
Table 4 Descriptive statistics for each ASEAN-10 country
Country 𝐙𝐢,𝐭 EA ROA ROE BP INEQ EG CF FF Unemp LA Size AG BSIZE BIND
Vietnam 1.31 14.95 0.68 4.23 8.83 0.39 3.93 29.24 37.34 10.77 54.57 15.47 19.52 9.77 43.57
(0.82) (12.61) (6.65) (45.13) (4.45) (0.02) (5.81) (2.67) (13.18) (3.88) (11.20) (0.63) (26.08) (2.95) (25.27)
Brunei 3.60 11.46 1.53 15.69 10.16 0.55 4.78 27.20 57.60 4.14 66.69 14.08 18.22 (1.54) –
(0.86) (8.06) (0.99) (10.54) (3.17) (0.02) (1.02) (2.57) (6.63) (1.09) (9.77) (1.45) (20.59)
Indone- 2.22 16.82 2.33 17.07 9.57 0.47 3.49 37.30 50.85 7.94 42.33 14.84 20.42 7.96 34.41
sia (1.45) (18.34) (2.79) (13.95) (5.75) (0.02) (2.23) (2.08) (6.46) (1.21) (17.74) (2.35) (28.76) (2.58) (14.01)
Thailand 3.36 7.46 1.15 15.26 13.11 0.39 4.17 72.09 68.57 8.03 73.03 16.46 13.13 9.68 62.12
(0.41) (2.21) (0.63) (7.29) (2.44) (0.04) (1.82) (2.39) (5.18) (1.06) (5.61) (0.85) (12.63) (1.16) (24.37)
Singa- 2.72 12.66 1.85 16.96 8.35 0.47 4.31 36.16 65.40 12.56 64.08 15.26 18.22 6.84 54.00
pore (1.21) (3.79) (1.50) (13.21) (1.99) (0.03) (1.63) (2.79) (5.01) (1.91) (9.16) (0.98) (16.61) (1.28) (17.19)
Myan- 3.50 13.71 1.36 14.66 9.90 0.46 4.11 23.06 43.94 6.39 54.36 13.63 12.87 6.45 –
mar (0.77) (14.14) (0.72) (8.07) (2.97) (0.03) (2.35) (1.84) (8.36) (1.64) (9.40) (1.70) (10.84) (1.51)
Cambo- 0.77 25.28 2.80 17.25 7.37 0.43 2.39 33.58 62.35 4.04 48.70 16.15 14.92 14.76 50.37
dia (1.76) (25.46) (2.39) (6.22) (4.45) (0.05) (2.76) (2.40) (5.51) (1.03) (26.49) (1.46) (26.71) (3.08) (11.65)
Laos 2.91 11.24 1.51 12.33 8.37 0.50 7.41 34.96 71.92 7.18 72.90 14.92 9.86 9.00 90.00
(1.60) (3.77) (1.58) (13.54) (1.85) (0.02) (3.18) (4.71) (6.87) (3.27) (10.75) (1.38) (18.84) (1.64) (0.00)
Malay- 2.53 12.16 1.79 15.81 9.71 0.44 5.93 36.33 62.67 4.58 65.38 14.11 16.98 8.10 52.16
sia (1.02) (7.64) (2.44) (14.87) (3.37) (0.03) (2.57) (3.24) (4.43) (0.81) (11.47) (1.76) (19.45) (2.05) (23.65)
Philip- 2.46 10.29 2.96 28.56 10.49 0.50 3.22 22.42 32.28 10.69 49.83 15.34 42.90 10.78 80.00
pines (0.34) (3.15) (1.66) (13.78) (2.86) (0.04) (7.23) (3.29) (11.49) (3.47) (9.68) (1.23) (31.95) (4.32) (0.00)
Total 2.42 13.78 1.89 16.00 9.73 0.45 4.31 36.85 54.58 7.78 56.56 15.02 19.28 9.66 47.81
(1.34) (13.45) (2.93) (18.85) (4.26) (0.05) (3.64) (13.07) (14.02) (3.26) (17.90) (1.83) (24.66) (2.87) (21.26)
This table reports the primary descriptive statistics of all variables over the period of 2002–2018
The dependent and independent variables are as described in Table 3: Zi,t Z-score, EA Equity/assets, ROA Return on assets, ROE Return on equity, PB Price-to-book,
INEQ Gender inequality, EG GDP growth, CF Corruption freedom, FF Financial freedom, Unemp Unemployment, LA Loans/assets, Size Bank size, AG Asset growth,
BSIZE Board size, BIND Board independence. Bank-level gender variables have been already presented in Table 2
1229
13
1230
13
Table 5 Correlation matrix
Zi,t EA ROA ROE BP WB WE
Zi,t 1
EA 0.3039* (0.000) 1
ROA 0.0471 (0.180) 0.1025* (0.000) 1
ROE 0.1435* (0.000) 0.0216 (0.540) 0.8024* (0.000) 1
BP − 0.2136* (0.000) − 0.6627* (0.000) − 0.2412* (0.000) − 0.1115* (0.000) 1
WB − 0.1126* (0.010) 0.0501 (0.270) 0.0214 (0.640) − 0.0576 (0.200) − 0.1215* (0.010) 1
WE − 0.1644* (0.010) − 0.0924 (0.130) 0.0609 (0.320) − 0.0062 (0.920) 0.0942* (0.012) 0.1728* (0.000) 1
This table reports Philips-Perron correlation coefficient between all financial variables (risk and performance measures and gender diversity variables). P-values are dis-
played between brackets
A. Bouteska, M. Mili
with Price-to-book (BP) (0.0942). The table shows that few other dependent vari-
ables are highly correlated with each other, such as the correlation between ROA
and ROE (0.8024), which might raises multicollinearity issues. To address such con-
cerns, these variables will not be included in the same regression specifications.
3.10 Empirical analysis: model specifications
We start our empirical tests by examining the relationships between the presence of
women on the boards of directors of ASEAN banks and the independent variables.
To test the effect of gender diversity and board characteristics on a bank’s risk, per-
formance and activity, we use the following generic regression model:
RISK i,t ∕PERFORMANCEi,t = 𝛽0 + 𝛽1−2 GENDERDIVERSITY i,t + 𝛽3−4 GOVERNANCEi,t
+ 𝛽5−9 BANKCHARACTERISTICSi,t + 𝛽10−14 MACROECONOMICCONDITIONSi,t (2)
+ 𝛽15−16 FINANCIALREGULATIONSi,t + YEARDUMMIESi,t + 𝜀i,t
With RISK i,t ∕PERFORMANCEi,t is the dependent variable measured by the

Z-score ( Zi,t ), Equity to assets (EA), Return on assets (ROA), Return on equity
(ROE), and Price to book (PB) by bank i in year t . The governance variables are
Board size (BSIZE) and Board independence (BIND). The control variables are a
set of bank characteristics, macroeconomic conditions, and financial regulations that
are expected to affect bank risk and performance. They include Foreign bank (FB),
Commercial bank (CB), Loans/assets (LA), Bank size (Size), Asset growth (AG),
GDP growth (EG), Unemployment (Unemp), Gender inequality (INEQ), Financial
freedom (FF), Corruption freedom (CF), Activity (ACT), Supervisory power (SVP).
We include year dummies to control for country and year effects.
4 Empirical results
4.1 Paired sample t‑test
In Table 5, we present the results of testing for the relation between gender diversity
and risk and performance of ASEAN banks, using two-tailed t-tests, between the
more profitable banks and most and least risky banks in each country. To test the dif-
ference in mean between the two banking sub-groups, we split our original sample
into two subsamples on the basis of performance level, namely, banks having above
median results of Z-score, EA, ROA, ROE, and PB measures are considered as
subsample high values, while banks having below median results in the mentioned
proxies are as considered as subsample low values. Similarly with the pairwise Pear-
son correlation matrix, we find negative and statistically highly significant differ-
ences between women executives and women board, and Z-scores show an asso-
ciation with lower risk aversion among women (Adams & Funk, 2012). However,
contrary to what is expected, the t-tests indicate different results for other dependent
variables in interaction with each gender variable, which suggest for example a dif-
ferent way of thinking about behaviour of both women executives and women board
13
Table 6 Paired sample t-test High Low Difference
Z-score
WE 12.151 20.781 − 8.632 ***
MGD 0.422 0.733 − 0.311 ***
WB 3.660 5.491 − 1.823 ***
GDB 0.060 0.120 − 0.060 ***
EA
WE 13.934 16.175 − 2.242 *
MGD 0.530 0.540 − 0.010
WB 5.172 3.950 − 1.222 **
GDB 0.131 0.051 0.080 ***
ROA
WE 16.700 15.210 1.490
MGD 0.655 0.484 0.171 ***
WB 4.642 4.421 0.220
GDB 0.111 0.061 0.050 **
ROE
WE 16.598 15.267 1.336
MGD 0.625 0.486 0.140 ***
WB 3.769 5.464 − 1.695 ***
GDB 0.083 0.093 − 0.01 0**
PB
WE 16.087 14.076 2.011
MGD 0.534 0.556 − 0.02 2
WB 3.749 5.368 − 1.620 ***
GDB 0.050 0.120 − 0.070 ***
This table reports test in mean of the two sub-samples High and Low
gender diversity. The Bank-level gender variables are as defined in
Table 3
*, **, and *** refer to significance at the 10%, 5%, and 1% levels,
respectively
members. Additionally, according to equity/assets (EA), women board tend gener-

ally to increase bank capital equity while women executives tend to have consider-
able less from equity capital. As indicated, Managerial gender diversity has positive
significant differences in ROA and ROE, showing better efficiency of women CEOs.
Gender diverse board and Women board are negatively different, showing less per-
formance of those variables. As documented earlier by Farag and Mallin (2017),
we find that the behavior among women directors of boards of directors and super-
visory boards differ from that of management boards ones. Importantly, women in
management boards are far less risk-averse. In this context, as the critical mass is
reached 18%, they provide evidence of a positive relation between number of female
in management boards and risk-taking behavior. In contrast, they document that the
significant negative relation is undoubtedly obtained between number of female in
13
Table 7 The impact of gender diversity on bank risk and performance

Zi,t EA ROA ROE PB
WE − 0.01* (0.00) − 0.04* (0.02) 0.03* (0.02) 0.14 (0.09) 0.03** (0.01)
WB − 0.02*** 0.03 (0.04) 0.01 (0.03) 0.07 (0.15) − 0.02*** (0.03)
(0.03)
BSIZE 0.18* (0.01) 0.29 (0.04) − 0.26 (0.03) 11.94** (0.14) − 0.88 (0.02)
CB 0.75*** (0.13) 1.60** (0.67) − 0.23 (0.46) − 1.58 (2.57) − 0.70 (0.42)
FB − 0.39*** − 2.25*** 0.22 (0.36) 0.35 (2.02) − 0.43 (0.32)
(0.10) (0.50)
EA 0.01 (0.01) 0.16**** (0.05) 0.24 (0.27) − 0.47*** (0.04)
LA 0.01*** (0.00) 0.08*** (0.02) 0.00 (0.01) − 0.08 (0.08) − 0.04*** (0.01)
Size − 0.16*** − 0.75*** 0.08 (0.12) − 0.08 − 0.40*** (0.11)
(0.03) (0.17) (0.69)***
AG 0.00* (0.00) − 0.02* (0.01) 0.01 (0.01) 0.06 (0.05)* 0.01 (0.01)
EG 0.02 (0.03) 0.01 (0.17) − 0.09 (0.11) − 0.46 (0.62) 0.01 (0.10)
Unemp 0.07 (0.05) 0.40 (0.26) 0.02 (0.18) 0.42 (1.00) 0.18 (0.16)
FF − 1.27* (0.69) − 4.68 (3.88) − 1.93 (2.61) − 13.32 (14.68) 3.29 (2.39)
CF 0.74 (0.95) 4.88 (5.38) − 1.02 (3.58) 2.94 (20.15) 3.10 (3.31)
ACT 0.41 (0.28) 2.24 (1.46) 0.37 (1.01) 8.45 (5.71) − 0.76 (0.90)
SVP 0.10 (0.50) 1.18 (2.83) − 1.13 (1.87) − 2.75 (10.51) − 1.62 (1.74)
Constant 2.44 (3.48) 4.68 (19.69) 11.30 (13.15) 21.03 (73.93) 6.87 (12.09)
Country_FE Yes Yes Yes Yes Yes
Year_FE Yes Yes Yes Yes Yes
Sample Size 215 234 225 224 234
Adjusted R2 76.37 57.8 2.39 6.19 69.14
F-Statistic 19.7*** 9.86*** 1.15* 1.4* 15.11***
This table reports the regression results of five varieties of Eq. (2) with Zi,t , EA, ROA, ROE, and PB as
dependent variables over the period 2002 to 2018 for the 234 financial institutions. The variables are
described in Table 3. t-statistics are between parentheses
*, **, and *** refer to significance at the 10%, 5%, and 1% levels, respectively
board of directors and supervisory board and risk-taking behavior. Taken together,
the results of our analysis of t-tests suggest that women executives seem to have a
lower risk-aversion, but also associated with long-run more profit realization than
their men counterparts (Table 6).
4.2 Gender diversity and bank risk and performance
In this section we test the impact of Gender diversity and Board characteristics on
the Z-score and other measures bank risk and performance using the panel regres-
sion in Eq. 2, with standard errors corrected for heteroskedasticity and clustering
by firm. The results are reported in Table 7. To address the issue of omitted and
13
potentially unobservable variables, we use fixed year and country effects. The results
globally show significant relationship between women members in boards and exec-
utive positions, and risk and performance of ASEAN banks. Based on F-statistic
and R-Squared, the table shows that Z-score, EA, ROA, ROE and PB are highly
significant. The findings support the pairwise correlations and t-test results claim-
ing a negative significant relationship between Women executive (WE) variable and
Z-score ( Zi,t ) and (EA) ratio, while a positive relationship between this variable of
interest (WE) and ROA, ROE, and PB ratio, indicating a decrease in risk aversion
that leads to a higher level of profitability for ASEAN banks managed by women.
The variable Women board (WB) shows a negative and significant impact on the
Z-score ( Zi,t ) and (PB) ratio, which support the previous univariate tests. There is a
difference between men and women on board regarding investment behavior since
women invest less money and invest their money in less risky investments compared
to men. Some explanations for this behavior at Southeast Asia region include lower
earnings, lower financial knowledge, lower financial education, lower comfort lev-
els with math, or smaller retirement benefits (Hira & Loibl, 2008; Marinelli et al.,
2017). We can say that having more women on board in the ASEAN banking sector
will enhance the bank’s understanding of women’s needs. The association between
the size of the board (BSIZE), Z-score ( Zi,t ) , and (ROE) is highly positive and sig-
nificant. As we control for country effects, most of our macroeconomic variables
lose their significance. The results show also a high level of Z-score ( Zi,t ) and (EA)
ratios, for Commercial banks (CB) and banks having greater loan to asset (LA)
ratios. Conversely, foreign banks show lower Z-scores and (EA) ratios. (EA) ratios
are positively linked to (ROA) but negatively associated to market performance in
terms of (BP) ratios. Likewise, banks with greater rates of loan to assets (LA), and
larger banks show negative significant effects on (PB) ratios.
5 Robustness checks
5.1 An alternative estimation of gender diversity and bank risk and performance
In Table 8, we alternatively estimate our panel regression model described by

Eq. (2). We include only one bank-specific and corporate governance variable
to increase the bank sample and the degrees of freedom, as we already use
fixed country and year effects. The results are similar to the ones reported in
the main equation model. Moreover, the significance of women executive (WE)
increases to 1% with positive relationship with (ROE) and (PB) ratios. Similarly,
it increases its significance to a 5% level keeping its negative effect on Z-score
( Zi,t ) . Women board (WB) still negative and significant with the Z-score ( Zi,t )
and (PB) ratio. Board size (BSIZE) is shown to have positive impact on Z-score
( Zi,t ) and (ROE). Regarding the bank specific variables, foreign and large banks
are negatively and highly significantly associated with Z-score ( Zi,t ) and (EA)
ratio. The variable Loan to asset (LA) is highly significant and positively corre-
lated to Z-score ( Zi,t ) and (EA) ratio and negatively correlated to (PB).
13
Table 8 The impact of gender diversity on bank risk and performance (alternatively experiment)
Zi,t EA ROA ROE PB
WE − 0.01** (0.00) − 0.05* (0.03) 0.03 * (0.01) 0.20*** (0.08) 0.05*** (0.02)
WB − 0.02** (0.01) 0.04 (0.05) 0.02 (0.02) 0.09 (0.14) − 0.03** (0.03)
BSIZE 0.09** (0.19) − 0.39 (1.24) 0.00 (0.64) 13.65*** (3.54) − 0.16 (0.82)
FB − 0.37*** (0.10) − 2.04*** (0.64) − 0.28 (0.32) − 1.18 (1.80) 0.58 (0.42)
Size − 0.13*** (0.04) − 1.01*** (0.21) 0.01 (0.01) − 0.04 (0.08) − 0.11 (0.14)
LA 0.01*** (0.00) 0.07*** (0.03) − 0.04 (0.11) − 0.27 (0.63) − 0.09*** (0.02)
Constant 3.16 (0.83) 24.95*** (5.43) 1.78 (2.79) 1.50 (15.51) 16.10*** (3.59)
Sample Size 222 248 232 231 248
Adjusted R2 69.61 40.93 0 8.99 44.35
F-Statistic 19.08*** 7.11*** 1 1.81*** 8.03***
This table reports the regression results of five varieties of Eq. (2) with the Zi,t , EA, ROA, ROE and
PB as dependent variables over the period 2002 to 2018 for 248 financial institutions. The variables are
defined in Table 3. t-statistics are between parentheses
6 Discussions
Generally, employing alternative models and alternative performance measures, the

main estimation results indicate that the percentage of women executives leads to
higher bank risk and better bank performance. Our results are partly not consistent
with prior literature, that suggests that organizations with women leaders are more
conservative more risk averse than men (e.g., Faccio et al., 2016; Huang & Kisgen,
2013; Palvia et al., 2015). However, these plentiful amounts of empirical researches,
except that of Palvia et al. (2015) had been interested in the percentage of women on
board of directors. It is important to note that Adams and Funk (2012) have argued
that women board members are less risk averse than men board members, which
is in line with our results. The findings don’t show a significant impact of the per-
centage of female on board on bank performance. One possible explanation is the
absence of critical number of female on board. The proportion of women board
members is lower than 5% on average, while it is higher than 10% on average for
well-developed countries. Also, there exist almost no boards containing more than
one female. This reasoning largely agree with Flabbi et al. (2016), who imply that
there must be at least 30%, a critical mass, for women within the board of director to
make a significant difference in enhancing firm performance. However, the impact
of the percentage of women executives on bank profitability shows strong results for
less risk aversion and higher profitability. The result complements Farag and Mallin
(2017), who use a large sample of European banks, in the sense that there are differ-
ences with the degree of risk-taking under the gender diversity of the management
team and the board of directors. They argued that the percentage of female non-
executive directors reduces the risk of the bank system, while gender diversity in the
13
Table 9 The impact of gender diversity on bank risk and performance with interaction variable
(WE × INEQ)
Zi,t EA ROA ROE PB
WB − 0.02** (0.01) 0.04 (0.05) 0.02 (0.02) 0.08 (0.13) − 0.04 (0.03)
INEQ 3.81 (4.53) − 23.58 (28.34) 11.48 (15.25) 234.38*** 6.62 (18.76)
(82.59)
WE 0.06 (0.04) 0.03 (0.24) 0.04 (0.12) 2.07*** (0.66) − 0.09 (0.16)
WE × INEQ − 0.16* (0.08) − 0.17 (0.54) − 0.03 (0.28) − 4.43*** (1.53) 0.32 (0.36)
BSIZE 0.06 (0.19) − 0.33 (1.25) − 0.06 (0.64) 12.33*** (3.47) − 0.16 (0.83)
FB − 0.37*** (0.10) − 2.13*** (0.65) − 0.24 (0.33) − 0.59 (1.78) 0.62 (0.43)
Size − 0.14*** (0.04) − 1.03*** (0.21) − 0.04 (0.11) − 0.40 (0.61) − 0.09 (0.14)
LA 0.01*** (0.00) 0.06** (0.03) 0.01 (0.01) − 0.06 (0.07) − 0.08*** (0.02)
Constant 1.58 (2.10) 35.09** (13.22) − 3.11 (7.07) − 97.67*** 13.16 (8.75)
(38.30)
Sample Size 222 248 232 231 248
Adjusted R2 69.87 40.68 0 13.39 44.16
F-Statistic 18.08*** 6.65*** 0.95 2.19*** 7.51***
This table reports the regression results of five varieties of Eq. (2) with Zi,t , EA, ROA, ROE and PB
as dependent variables and other control variables with introduction of a possible moderating effect
between women executive and gender inequality index variable (WE × INEQ) over the period 2002 to
2018 for the 248 financial institution. (INEQ) is ranging between 0 and 1, and higher values show greater
gender inequality. All variables used are described in Table 3. t-statistics are presented between parenthe-
ses
executive board increases considerably bank risk-taking behavior. However, only a

critical mass of at least 18% women directors does produce a significant effect.
6.1 The effect of the introduction of gender inequality index
Our findings demonstrate that women executives in ASEAN banks have tendency
to be more risk seeking than the men and have higher performance. Based on our
descriptive analysis, women representation in ASEAN banking is far from the aver-
age representation across developed countries. Therefore, it seems that the exist-
ence of a female who holds a leading position in an ASEAN bank is especially of
rare case. For the ASEAN region, females are less risk averse than average females,
and even more than males. Since we are working on the ASEAN context, we find
interesting to investigate whether the introduction of an interacted variable between
women executive (WE) and the gender inequality index (INEQ) has an effect on
bank risk and performance. (INEQ) ranges between 0 and 1, and large values show
high level of gender inequality. For this purpose, we generate a (WE × INEQ) vari-
able and run our regression using the same sample period. Results presented in
Table 9 provide evidence of a moderating effect on the dependent variables (ROE)
13
and Z-score ( Zi,t ) . For quality model, the coefficient of the interaction variable
(WE × INEQ) appears negatively significant. The result indicates the importance
of gender inequality in reducing the impact of women executives on (ROE) and
Z-score ( Zi,t ).Moreover, after the adoption of Z-score ( Zi,t ) as the dependent vari-
able, only the coefficient of women executive (WE) turns to positive, implying that
with the control of the interaction between female executives and gender inequality
(WE × INEQ), the percentage of female executives is negatively linked to bank risk-
taking, which is not against prior research. Meanwhile, the variable women exec-
utive (WE) appears not significant. We perform another analysis by removing the
sample’s 10% most gender-equal countries (the countries with an INEQ index below
0.386) to verify whether the gender inequality has a possible effect on our main
results. Globally, the obtained results are much similar to those found in Table 9.
However, women executive (WE) becomes not significant for the dependent variable
(EA).The same results were obtained for independent variables, when eliminating
the most gender-unequal countries of our sample, or when we divide our sample into
two, namely, the most gender-equal countries (lower than the median level of INEQ)
and the most gender-unequal countries (higher than the median level of INEQ). A
possible explanation for this result is that the lowest value of (INEQ) index in our
sample is 0.329, while in most developed countries are lower than 0.100. Thus, our
sample, it may be viewed as a highly gender unequal one and not necessarily to
remove observations with the highest (INEQ) index.
6.2 Controlling for potential endogeneity problems
Notwithstanding our insightful results on the relationship between gender diversity-

bank risk and performance, our findings may carry a risk of bias due to the endoge-
neity concern and the opposite causality between variables. In particular, the omis-
sion of other explanatory variables could affect our results. To address this issue, we
run a two-stage instrumental variable approach to test if efficiency and performance
are associated with the gender diversity in the management team. In this context, we
include two alternative instruments in the first-stage regressions. Our first instru-
ment is the country level variable of women employment (WEM), which represents
the ratio of women to men labor force participation, estimated by the International
Labour Organization (ILO). We conjecture that the higher the variable value in a
country, the less likely it is for women to reach a top management position. We
understand that in countries where female employment is promoted, gender equality
is fostered, and women might have more career opportunities. Second, in line with
Palvia et al. (2015), we use the commonness of banks managed by women (CBMW)
as an explanatory variable and consider the banks having above the median (12.5%)
of women executives as women managed. We investigate the commonness of banks
managed by women over the total of other banks in the country as an instrument for
women executive (WE). We don’t include the main bank to assure that the financial
characteristics of a specific bank do not have an effect on the calculation of the indi-
cator. Following Eq. (3), the CBMW indicator is given by:
13
(NBA − 1)
CBMW = (3)
(NBA − 1 + NBB)
where (CBMW) denotes the commonness of banks managed by women for a par-
ticular bank at a particular year, (NBA) represents the number of banks with above
the median (12.5%) women CEOs in the country, and (NBB) represents the number
of banks with below the median (12.5%) women executives in the country. We sup-
pose that the commonness of banks managed by women must be positively associ-
ated with the ratio of women executives. Furthermore, this country variable is con-
sidered as an appropriate instrumental variable, since its link with the individual
banks’ efficiency or performance has not been studied in the literature. The results
of the two stage regressions are reported in Table 10. Panel A shows the regressions
with levels of women employment (WEM) as the instrumental variable; Panel B
shows the regressions with commonness of banks managed by women (CBMW) as
the instrumental variable. In the first step, from Panel A, we find that women execu-
tive is negatively and significantly affected by the instrumental variable, as expected.
The results also show that larger financial institutions with a higher loans to total
assets ratio, and banks with larger boards, are negatively related to the percent-
age of women executive; while foreign banks show a positive relation with women
executive (not tabulated).In the second step, from Panel A, the association between
the instrumented variable and (ROA) and (ROE) measures is negative and statisti-
cally significant, while it is positive and statistically significant with (EA) measure.
However, there is no significant correlation between the instrumented variable and
Z-score ( Zi,t ) or (PB).These results from Panel B are not similar to those reported
by Panel A. In the first stage, we find a high positive and significant correlation
between women executives (WE) and the instrumented variable. The results of the
second stage regressions confirm our initial findings for the risk measure Z-score
( Zi,t ) and the performance measure (PB). The instrumental variable appears to be
negatively and significantly associated with Z-score ( Zi,t ) and positively and signifi-
cantly associated with (PB). Surprisingly, a positive and significant relationship is
found between the instrumented variable and (EA) ratio, while (ROA) and (ROE)
become insignificant in this regression.
6.3 Additional endogeneity control
In order to better investigate the endogeneity problem, we estimate our models

using the first difference in our dependent variables. The results of changes in
Z-score ( Zi,t ) , (ROA), (LA), and (PB) show that women executive (WE) becomes
insignificant which indicate endogeneity issue. However, Women executive keeps
its sign and significance when the changes in (ROE) are used as dependent vari-
able. Alternatively, there is likely a lag before a newly added woman board mem-
ber is able to cause a difference in board functioning, and therefore our change
variables are not able to detect this relationship.
13
Table 10 2SLS Two stage regression approach
Variable First stage Second stage Second stage Second stage Second stage Second stage
WE Zi,t ROA ROE EA PB
Panel A: levels of women employment (WEM) as the instrumental variable

Instrumented women executive (WE) − 1.25** (0.62) 0.03 (0.03) − 0.36*** (0.11) − 2.68*** (0.64) 0.98*** (0.38) 0.10 (0.13)
Country_FE Yes Yes Yes Yes Yes Yes
Year_FE Yes Yes Yes Yes Yes Yes
Firm_FE No No No No No No
Sample Size 248 423 438 437 459 458
Adjusted R2 4.68 41.13 10.32 13.54 41.08 30.41
F-Statistic 8.13*** 13.91*** 10.8*** 3.44*** 12.41*** 8.13***
Panel B: commonness of banks managed by women (CBMW)as the instrumental variable
Instrumented women executive (WE) 6.167*** (1.982) − 0.115*** (0.029) 0.21 (0.255) − 1.692 (1.298) 1** (0.503) 0.757** (0.321)
Macro-economic controls Yes Yes Yes Yes Yes Yes

Firm_FE Yes Yes Yes Yes Yes Yes
Sample Size 233 214 223 223 232 223
Adjusted R2 (within) 26.73 26.72 80.87 20.63 30.64 54.67
F-Statistic 5.41*** 4.92*** 54.32*** 64.43*** 6.52*** 14.30***
This table reports the regression results of the 2SLS models. The first column is the first-stage regression with Women executive (measured as percentage of female over
total executive positions) as dependent variables. Columns 2 to 6 report the second-stage regressions (2SLS) results with Zi,t , EA, ROA, ROE and PB as dependent vari-
ables, respectively. t-statistics are between parentheses
1239
13
7 Conclusion
Our research theoretically investigates the logically plausible impact of gender

diversity in boards and management positions on the bank risk and performance by
using the five indicators: bank risk (Z-score ( Zi,t ) , (EA) ratio) and bank performance
(ROA, ROE, and PB). In this study, we try to contribute to the existing literature by
examining this relationship for the ASEAN financial institutions applying a sample
of 75 banks from 10 emerging ASEAN economies during the period of 2002–2018.
Our results show that banks with a higher percentage of women executives are less
risk averse and more profitable. This result provides different evidence from Palvia
et al. (2015) and prior gender diversity works, which suggest that gender diversity
should be related to les risk-taking by banks. Furthermore, women executives in
ASEAN countries are shown to have more risk tolerance behavior than their men
counterparts. We also document the existence of a moderating effect of INEQ index
between the variables women executive, Z-score ( Zi,t ) , and (ROE), which implies
that for countries with high gender inequality, the behavior of females may change.
However, the findings must be interpreted with caution, as this is the first paper
which sheds light on both the “women executives-risk” and the “women executives-
performance” in ASEAN banks. To the best of our knowledge, bank-level data from
that region is scarce and may suffer from endogeneity similar to majority of corpo-
rate governance studies. Yet, our findings had been confirmed by using additional
independent variables, by using commercial banks only, and by not including the
largest and smallest banks. Further, an additional test, i.e. a two-stage instrumental
analysis, had been applied to deal with the problem of endogeneity. We find no prob-
lem in confirming that gender diversity in executive positions affects bank risk and
performance. Our approach to address endogeneity issue supports the main findings
showing that women leaders express higher risk adverse behavior. To generalize our
main findings, this study could be extended if variables representing greater profit-
ability and lower risk in ASEAN banks are available and well-studied in previous
research, instead of using the key determinant as a proxy.
This study contributes to the existing literature in two main aspects: first, it is
interested in a particular type of directors still little treated in the literature, namely
female directors, and their influences on financial performance of banks. Second,
it sheds more light on the contribution of gender diversity in the top management
team, by examining the role women executives can play in emerging economies,
particularly in the Southeast Asian Countries context. As bank risk and performance
affect real economy, regulatory authorities should encourage exploring possible
sources of greater performance in ASEAN banks. In addition, prior studies located
in the United States show that better management practices for banks are generally
related to greater performance.
Our study has two main important implications for financial investors as well as
regulatory authorities. The first implication of our study derives from our finding
on the risk aversion of women members of boards of directors. We find evidence
that the reluctance of women to financial risk has an impact on the overall risk of
banks that they lead. This result has important implications for financial investors as
13
it helps them to adjust and monitor the level of risk of their investments. A second
implication of our research is that gender diversity should part of new approach of
financial institution governance in emerging economies. Gender diversity can be a
performance factor and can help to change the nature and dynamics of board out-
comes, making directors more sensitive to the consequences of their decisions.
These preliminary findings show that a greater proportion of women in the board
of directors and senior management boosts ASEAN bank performance. Future
research will be required in order to assess the impact of women in these particu-
lar roles and their impact on results, as well as to perform comparisons with other
non-financial sectors on an ASEAN scale. Additional research should look at a
larger data set from other industries like the manufacturing or technology, which
could potentially yield a more robust result. One might want to also consider large,
medium and even small ASEAN firms instead of only taking them all together in
sample. Finally, in addition to the complexity issue first raised in this article, further
research should examine other features of the business landscape that can influence
the impact of women (on risk and performance), such as the corruption, sustainabil-
ity, money laundry, and corporate social responsibility that prevail across banking
industry.
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maps and institutional affiliations.
Ahmed Bouteska Assistant Professor of Finance, Tunis El Manar University, Faculty of Economics and
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financial economics, corporate finance, international finance, financial market stability, and empirical
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Tunisia.
Mehdi Mili Associate Professor of Finance, College of Business Administration, University of Bahrain,
Department of Economics and Finance.
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Journal of Management and Governance (2022) 26:1213–1244

Women’s leadership impact on risks and financial

Accepted: 21 July 2021 / Published online: 2 August 2021

Keywords Corporate governance · Women leadership · Board gender diversity ·

JEL classification G01 · G21 · G30 · M14

we should take into account, the differences in corporate governance mechanisms

2.1 Women leadership and performance

Mínguez-Vera, 2008; Lucas-Pérez et al., 2014).Having women as independent direc-

2.2 Women leadership and performance with ASEAN context

H2 There is a negative association between top management diversity and the

Our study is conducted on financial institutions from 10 ASEAN countries (Brunei,

Table 1 Sample composition Country Observations Percent

Vietnam 100 7.98

This table reports the sample by country

3.3 Measure of bank risk

Following Baselga-Pascual et al. (2015), the z-score remains an approximation of

3.4 Measure of bank performance

3.5 Measure of gender diversity and set of corporate governance indicators

We focus on four main variables of interest to test whether appointing women in

3.6 Measure of bank characteristics

3.7 Measure of macroeconomic conditions

Macroeconomic factors such as economic growth, unemployment, and the eco-

3.8 Measure of financial regulations and other control variables

To reduce banks’ risk, regulatory authorities require banks to maintain a high

3.9 Summary statistics and pairwise correlations

Variable/Code Definition Sources

3.10 Empirical analysis: model specifications

With RISK i,t ∕PERFORMANCEi,t is the dependent variable measured by the

4.1 Paired sample t‑test

Table 6 Paired sample t-test High Low Difference

members. Additionally, according to equity/assets (EA), women board tend gener-

Table 7 The impact of gender diversity on bank risk and performance

4.2 Gender diversity and bank risk and performance

5.1 An alternative estimation of gender diversity and bank risk and performance

In Table 8, we alternatively estimate our panel regression model described by

Generally, employing alternative models and alternative performance measures, the

executive board increases considerably bank risk-taking behavior. However, only a

6.1 The effect of the introduction of gender inequality index

6.2 Controlling for potential endogeneity problems

Notwithstanding our insightful results on the relationship between gender diversity-

6.3 Additional endogeneity control

In order to better investigate the endogeneity problem, we estimate our models

Panel A: levels of women employment (WEM) as the instrumental variable

Macro-economic controls Yes Yes Yes Yes Yes Yes

Our research theoretically investigates the logically plausible impact of gender

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2.1 Women leadership and performance

2.2 Women leadership and performance with ASEAN context

Table 1 Sample composition Country Observations Percent

3.3 Measure of bank risk

3.4 Measure of bank performance

3.5 Measure of gender diversity and set of corporate governance indicators

3.6 Measure of bank characteristics

3.7 Measure of macroeconomic conditions

3.8 Measure of financial regulations and other control variables

3.9 Summary statistics and pairwise correlations

3.10 Empirical analysis: model specifications

4.1 Paired sample t‑test

Table 6 Paired sample t-test High Low Difference

Table 7 The impact of gender diversity on bank risk and performance

4.2 Gender diversity and bank risk and performance

5.1 An alternative estimation of gender diversity and bank risk and performance

6.1 The effect of the introduction of gender inequality index

6.2 Controlling for potential endogeneity problems

6.3 Additional endogeneity control