Board of Directors Diversity and Financial Performance: Evidence from Family-Owned Banks in Jordan

Abstract

The domain of research pertaining to Jordan has been relatively underexplored within the academic sphere, specifically concerning the potential ramifications of female directors on the operational efficacy of firms. This study is primarily centered upon a comprehensive examination of the intricate interrelation between gender diversity within the governance boards of corporations and the performance metrics of banks that are owned by families, all within the specific milieu of the Jordanian context. The research dataset is composed of family-owned banks spanning the temporal interval from 2019 to 2022. The findings stemming from our rigorous analysis indicate that the inclusion of women on the boards of directors does not engender a statistically noteworthy influence on the performance metrics of family-owned banks. Additionally, our empirical evidence underscores the deleterious impact of larger board sizes on the operational performance of banks. In view of the significant implications of bank performance on the global economic landscape, the interconnectedness of financial institutions on a worldwide scale, and the existing dearth of comprehensive legal protections in this geographic area, regulatory bodies and policy formulators would derive utility from a meticulous examination of potential avenues for heightening performance levels and fortifying governance mechanisms within Jordanian banks.