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Board gender diversity and the social performance of microfinance institutions

Bouslah, Kais, Li, Qian ORCID: and Mobarek, Asma ORCID: 2022. Board gender diversity and the social performance of microfinance institutions. Working Papers In Responsible Banking & Finance 23 (11) , pp. 1-55.

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Research Question/Issue: We investigate whether female directors influence the social performance of Microfinance Institutions (MFIs). We also explore the factors that might condition or moderate the influence of female directors on the different dimensions of MFIs’ social performance. Research Findings/Insights: Using an international sample of 2,293 MFIs operating in 116 countries from 2010 to 2018, we find that female directors have a positive impact on the overall social performance, especially in the products & services and environment dimensions. The positive effect is stronger for not-for-profit MFIs, those MFIs in cultures where women are more likely to experience financial inequality, and those MFIs in countries with more effective governance mechanisms. Theoretical/Academic Implications: We contribute to the emerging research stream of women representation in the boardrooms of organizations supplying public goods. We build on upper echelons theory and resource dependence theory to explain that female directors can bring diverse experience, knowledge and value to the board and can help MFIs make long-term strategic decisions to meet a wider range of stakeholders’ expectations on social and environmental performance. Practitioner/Policy Implications: Our findings offer insights to policymakers and practitioners, e.g., funders, interested in the roles of women directors in shaping decision making in industries supplying public goods such as the microfinance industry. We show that these roles are better understood when considering the organization’s type (for-profit versus non-profit) and the multidimensionality of MFIs’ social performance which captures the more complex relationships of an MFI with the different stakeholders.

Item Type: Article
Date Type: Publication
Status: Published
Schools: Business (Including Economics)
Subjects: H Social Sciences > HG Finance
Publisher: Centre for Responsible Banking & Finance
Date of First Compliant Deposit: 14 March 2023
Date of Acceptance: 2023
Last Modified: 02 May 2023 13:56

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