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Critical Mass in the Boardroom of Croatian Banks

Author

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  • Kramaric Tomislava Pavic

    (Senior Lecturer, University of Split, University Department of Professional Studies)

  • Miletic Marko

    (Senior Lecturer, University of Split, University Department of Professional Studies)

Abstract

This paper investigates the influence of gender diversity in the boardroom of Croatian banks on their performance. Specifically, we deal with both management and supervisory boards. Moreover, based on critical mass theory, the authors try to find out what constitutes critical mass. Using a static panel analysis on a sample of all commercial banks that operated in the period 2002-2014, three models were estimated with return on assets (ROA), return on equity (ROE) and net interest margin (NIM) as dependent variables. Board structure variables include gender of the chairperson, size of the board, share of women on the board and four dummy variables constructed on critical mass theory, specifically uniform group, skewed group, tilted group and balanced group. Other controls employed in the model include capital adequacy, the growth rate of assets at the bank level, ownership, age and a crisis dummy. The main finding is that when a critical mass of 20%-40% of women on the management board has been reached, bank performance improves.

Suggested Citation

  • Kramaric Tomislava Pavic & Miletic Marko, 2017. "Critical Mass in the Boardroom of Croatian Banks," South East European Journal of Economics and Business, Sciendo, vol. 12(1), pages 22-37, April.
    • Handle: RePEc:vrs:seejeb:v:12:y:2017:i:1:p:22-37:n:2
    DOI: 10.1515/jeb-2017-0002
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    More about this item

    Keywords

    banks; corporate governance; firm performance; gender equality;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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