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Women in the Boardroom and Financial Soundness-Study at Islamic Banks in Southeast Asia

In: Proceedings of the International Colloquium on Business and Economics (ICBE 2022)

Author

Listed:
  • Hasan Mukhibad

    (Universitas Negeri Semarang, Faculty of Economics)

  • Doddy Setiawan

    (Universitas Sebelas Maret, Faculty of Economics and Business)

  • Y. Anni Aryani

    (Universitas Sebelas Maret, Faculty of Economics and Business)

  • Falikhatun

    (Universitas Sebelas Maret, Faculty of Economics and Business)

Abstract

The study of gender diversity of Islamic bank boards (Board of Directors-BOD and Shariah Supervisory Board-SSB) is still limited. The aim of this study is to empirically prove the effect of gender diversity on the board (BOD and SSB) on financial soundness. We use unbalanced panel data on 38 Islamic banks in 5 countries in Southeast Asia with an observation period of 2010–2019. Using Random-effects GLS regression, we found that BOD and SSB gender diversity did not affect financial soundness. However, we found that women in SSB members strengthened the positive effect of BOD gender diversity on financial soundness. The corporate governance structure of Islamic banks, BOD and SSB are jointly involved in making bank business decisions. SSB as a multi-layer governance and completes the duties of BOD as supervisor and advisor in bank operations. The presence of women as SSB members strengthens the relationship between BOD gender diversity and financial soundness. Our results are robust after performing the 2SLS test to address the possible endogeneity problem.

Suggested Citation

  • Hasan Mukhibad & Doddy Setiawan & Y. Anni Aryani & Falikhatun, 2022. "Women in the Boardroom and Financial Soundness-Study at Islamic Banks in Southeast Asia," Advances in Economics, Business and Management Research, in: Rahmawati Rahmawati & Mulyaningsih Tri & Arifin Taufiq & Hendarsjah Hidajat (ed.), Proceedings of the International Colloquium on Business and Economics (ICBE 2022), pages 153-165, Springer.
    • Handle: RePEc:spr:advbcp:978-94-6463-066-4_14
    DOI: 10.2991/978-94-6463-066-4_14
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