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Board gender diversity and environmental, social and governance performance of US banks: moderating role of environmental, social and corporate governance controversies

Mohammad Hassan Shakil (School of Accounting and Finance, Faculty of Business and Law, Taylor’s University, Subang Jaya, Malaysia)
Mashiyat Tasnia (Institute of Islamic Banking and Finance, International Islamic University Malaysia, Kuala Lumpur, Malaysia)
Md Imtiaz Mostafiz (Sheffield Business School, Sheffield Hallam University, Sheffield, UK)

International Journal of Bank Marketing

ISSN: 0265-2323

Article publication date: 6 November 2020

Issue publication date: 5 July 2021

2380

Abstract

Purpose

Gender diversity in corporate boards is broadly studied in existing corporate governance literature. However, the role of board gender diversity on environmental, social and governance (ESG) performance of the banks is still unaccounted for. Drawing on resource dependence and legitimacy theory, this study addresses this pressing research issue. Moreover, investigation of ESG controversies as a moderator paves the existing corporate governance research to the new avenues.

Design/methodology/approach

Data were sourced from Refinitiv database on 37 US banks from the period of 2013 to 2017. This study employs static and dynamic panel regression models that include random effects, fixed effects and dynamic generalised method of moments (GMMs) to test the hypotheses. Furthermore, system GMM is used to reduce the issue of endogeneity, measurement error, omitted variables bias and bank-specific heterogeneity.

Findings

We identify a significant positive relationship between board gender diversity and the ESG performance of US banks. However, the result propounds non-significant moderating effect of ESG controversies on the board gender diversity–ESG performance nexus.

Originality/value

Literature on board gender diversity and ESG separately and predominantly explains firm/bank's financial performance. This study is one of the pioneering attempts to explain the role of board gender diversity on ESG performance. Although incremental, however, this study also contributes to the literature on ESG in the US context.

Keywords

Acknowledgements

This work was supported by Taylor’s University through its TAYLOR’S PhD SCHOLARSHIP Programme.

Citation

Shakil, M.H., Tasnia, M. and Mostafiz, M.I. (2021), "Board gender diversity and environmental, social and governance performance of US banks: moderating role of environmental, social and corporate governance controversies", International Journal of Bank Marketing, Vol. 39 No. 4, pp. 661-677. https://doi.org/10.1108/IJBM-04-2020-0210

Publisher

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Emerald Publishing Limited

Copyright © 2020, Emerald Publishing Limited

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