The Effects of Board Gender Diversity on Bank Performance and Risk-taking: Evidence from the Banking Sector in sub-Saharan Africa

Banking crises and governance failures remain persistent challenges in sub-Saharan Africa (SSA), where female representation on corporate boards continues to lag behind that observed in other regions. Despite growing global attention to board diversity, most empirical evidence on the relationship between gender diversity, performance, and risk-taking originates from developed economies, where governance systems and cultural contexts differ markedly from SSA. This contextual gap raises critical questions about whether and how gender diverse boards influence firm outcomes in African banking environments. The study examines the effects of board gender diversity on bank performance, and risk-taking in sub-Saharan Africa, with a focus on the moderating role of national culture. Underpinned by institutional theory, the study examines how external pressures, cultural values, and regulatory frameworks shape the adoption of gender-diverse boards and their impact on bank performance and risk-taking. Using a quantitative longitudinal panel research design, the study analyses data from 191 commercial banks across 37 sub-Saharan African countries over the period 2011–2019. Secondary data were collected from Bloomberg, BankFocus, bank financial statements and Hofstede Insights. Ordinary least squares (OLS) regressions were employed for baseline estimations, followed by two-stage least squares (2SLS) and system generalized method of moments (GMM) to address potential endogeneity, dynamic effects, and unobserved heterogeneity. The empirical results reveal four key findings. First, board gender diversity exerts a positive and statistically significant effect on bank performance, measured by return on assets (ROA) and return on equity (ROE). Second, gender-diverse boards are associated with lower risk-taking, as evidenced by reduced volatility in performance measures. Third, national culture moderates the gender diversity performance relationship: high levels of individualism (IND) and masculinity (MAS) weaken, while high uncertainty avoidance (UAV) strengthens, the performance enhancing effects of board gender diversity. Fourth, national culture also moderates the relationship between board gender diversity and bank risk-taking, with the risk-mitigating influence of gender-diverse boards being stronger in long-term oriented (LTO) cultures but weaker in high uncertainty-avoidance (UAV) environments. These findings underscore the context dependent nature of gender diversity benefits in corporate governance. The study contributes to theory and practice in several ways. Theoretically, it extends institutional theory by integrating cultural contingencies into the understanding of gender diversity and governance effectiveness in developing contexts. Empirically, it enhances comparative corporate governance research by providing rare cross-country evidence from SSA banks, a region largely underrepresented in the literature. Methodologically, it demonstrates a rigorous approach that combines gender diversity, performance, risk, and national culture in one dynamic model. Practically, the findings offer valuable insights for policymakers, regulators, and industry stakeholders on how to foster effective gender-diverse boards, promote inclusive governance, and enhance the resilience of African banking institutions.

Name dc:type.qualificationname

PhD

Level dc:type.qualificationlevel

Doctoral

Grantor dc:publisher.institution

De Montfort University

Year dc:date.issued

2025

Author dc:creator

• Dompreh, Isaac Kwame

Licence

• https://dora.dmu.ac.uk/bitstreams/22411570-3ea3-47ed-bfcc-3fd1f4ef6fc1/download