How do gender diversity and CEO profile impact dividend policy in banking? Evidence from Islamic and conventional banks

Abstract

Purpose

This paper aims to examine the determinants of the dividend distribution policy in a banking setting.

Design/methodology/approach

Using a sample of 48 Islamic banks and 94 conventional banks from 15 Islamic countries over a period spanning from 2012 to 2019, we document the effect of board gender diversity, executive director profile and governance mechanisms on dividend payment decisions. We also analyze the moderating effect of Islamic banks on the relationship between gender diversity and dividend policy.

Findings

We find new evidence on the role of women directors in determining dividend distribution policy and confirm the risk aversion hypothesis, hence contributing to the ongoing debate on gender diversity literature. Our results show that the moderating role of Islamic banks is effective only for small banks.

Practical implications

Our findings have practical implications for shareholders, managers and financial analysts as they suggest rationalizing dividend distribution strategies.

Originality/value

Our study contributes to the growing body of knowledge on dividend policy, gender diversity and Islamic banks.

Citation

Sbai, H., Kahloul, I. and Grira, J. (2024), "How do gender diversity and CEO profile impact dividend policy in banking? Evidence from Islamic and conventional banks", Journal of Risk Finance, Vol. 25 No. 3, pp. 385-406. https://doi.org/10.1108/JRF-09-2023-0217