“Board gender diversity and bank performance in Jordan”

Board diversity is crucial for corporate governance and improves corporate outcomes by aligning management with stakeholders’ interests. Compared to advanced environments, Jordan’s decent sociocultural backdrop exhibits a higher level of gender bias. This study investigates the influence of board gender diversity (BGD) on Jordanian banking sector performance, an under-explored area. This quantitative paper employs Ordinary Least Squares (OLS), random, and fixed-effect approaches to analyze 182 bank-year observations for balanced longitudinal data analysis. These approaches correctly establish the BGD-Tobin’s Q nexus during 2010–2022. The coefficient of determination was 70.57%. The model confirms a positive correlation between BGD and market-based performance indicators. Findings support agency and resource dependency hypotheses, showing BGD’s role in decision-making. Hence, a one-unit increase in BGD causes a 37.2-cent increase in Tobin’s Q measure. Moreover, a one-unit change in board independence, board meetings, size, women’s representation in top management, and capital adequacy ratio, assuming all other factors remain constant, results in Tobin-Q changes of 2.57 cents, 32.8 cents, 5.78 cents, 51.2 cents, 30.55 cents, and 22.86 cents, respectively, and the same direction. The results show how BGD enhances bank performance and contributes to relevant theories. The results are vigorous in a variety of identification and estimation methodologies.


INTRODUCTION
Lately, gender diversity on boards has gained significance in academic and professional circles (Saleh et al., 2021).Despite the global movement for progress (Fatma & Chouaibi, 2023), women still face barriers to reaching the upper echelons of the business world (Yu & Madison, 2021), men continue to dominate boardrooms (Rahman & Za hid, 2021) including in Jordan (Aribi et al., 2018).Despite making up a sizable proportion of Jordan's population (International Finance Corporation, 2015), women are underrepresented in boardrooms and key decision-making roles.Jordan aims to empower women in strategic decision-making on boards voluntarily to enhance the social, political, and economic atmosphere (World Bank, 2018).The attendance of women on corporate boards (WOCBs) and its wedge on business performance spark intense debates in advanced markets, admitting their value in such positions.Still, studies on this matter have yielded conflicting results (Khan et al., 2023).Unlike industrialized nations like Norway, Spain, Italy, and Germany to name a few (Yu & Madison, 2021), where there are gender quotas in place, most developing countries (Unite et al., 2019) with fragile investor protection, like Jordan (Almarayeh, 2021), do not have rules or regulations requiring or encouraging WOCBs (Naz et al., 2023).So, there is a limited probe into

LITERATURE REVIEW
The rules and provisions of corporate governance (CG) are essential for improving the financial performance of a company.Respondents have been promoting the adoption of self-imposed measures outlined in the CG codes (Adams & Ferreira, 2009).In recent times, there has been an increasing acknowledgment of the importance of WOCBs (Terjesen et al., 2016).In their role, the boards of directors (BODs) keep a watchful eye on managers (Yu & Madison, 2021), providing oversight and guidance to ensure their actions align with company objectives (Đặng et al., 2020).The correlation between BGD and corporate performance is typically attributed to agency theory (Hazaea et al., 2023), which views it as a monitoring role of the BODs (Alshirah et al., 2023;Mansour et al., 2020).Alternatively, in resource dependence theory, female directors provide distinct knowledge, experience, and skills, enabling effective connections with external parties (Ferrary & Déo, 2022; Khan et al., 2023).Last, behavioral-based theories posit that women directors exhibit distinct behavioral traits compared to their male counterparts.Moreover, females tend to be intuitive and focused on the long-term goals, whereas males prioritize short-term goals (Kusumastati et al., 2022).Including female directors brings new perspectives and professional backgrounds that differ from those of the established male-dominated group.The presence of WOCBs introduces new insights and valuable recommendations to top managers, resulting in enhanced decision-making capabilities for problem-solving (Brahma et al., 2021;Đặng et al., 2020), increased creativity and innovation (Arora & Soni, 2023), and a better understanding of the client base and corporate climate (Mohsni et al., 2021), and improved information accessibility (Fatma & Chouaibi, 2023;Castro et al., 2023).The central idea is that BGD impacts company performance through the contributions of diverse talents, experiences, knowledge, perspectives, leadership styles, and values.By drawing upon agency theory and critical mass theories, multiple studies have delved into the connection between female directorship and French publicly listed firms' performance.The findings have consistently shown that BGD has a positive influence on both accounting and market-based performance (Bennouri et al., 2018;Gharbi & Othmani, 2023).These findings reveal a strong and unambiguous pattern when three or more females are selected to serve on the board, as opposed to the appointment of two or fewer females.In a different context, based on critical mass, resource dependency, and agency theories, the researchers investigated the relationship between BGD and company performance in the UK.Their findings showed a significant and positive link (Brahma et al., 2021;Fatma & Chouaibi, 2023).These results emphasize the significance of the legal system and the company's characteristics in balancing the advantages and disadvantages of BGD, both in terms of board oversight and guidance.Recent studies conducted in both Australian and US settings have yielded valuable insights into the influence of WOCBs on firm performance.These studies have specifically explored the ongoing controversy surrounding this topic and have successfully identified a positive correlation between BGD and financial performance.Importantly, they have also addressed methodological shortcomings observed in earlier research (Đặng et al., 2020).The studies provide empirical evidence that supports the rationale for board diversity, thereby contributing to the policy discourse (Rahman & Zahid, 2021;Vafaei et al., 2015).Similarly, a multi-country BGD investigation was conducted in 2010 using data from 3,876 listed companies in 47 countries.The findings also show that female directors improve the effectiveness of boards.In addition, they discov-ered that companies with more female directorship outperform on market and accounting indicators (Terjesen et al., 2016).Likewise, theories in social psychology provide the basis for arguments claiming that board diversity has implications for firm performance (Đặng et al., 2020;(Hazaea et al., 2023;Yu & Madison, 2021).Companies benefited from the inclusion of both men and women on corporate boards due to the advantageous behavioral distinctions between the two (Hazaea et al., 2023).Conversely, previous research has emphasized various negative consequences resulting from gender diversity (Unite et al., 2019), including decreased business performance and higher borrowing expenses caused by inadequate communication and inefficient coordination among board members (Mansour et al., 2024), which ultimately undermine effective decision-making (Alshirah et al., 2022).The observed results can be linked to an overemphasis on monitoring tendencies.The presence of diverse boards, with their range of viewpoints and ideas, often leads to difficulties in reaching a consensus during decision-making (Adams & Ferreira, 2009;Martinez-Jimenez et al., 2020).This implies that tokenism and familial connections frequently influence board nominations, rather than strong qualifications (Abdullah, 2014).On the flip side, research indicates that there is a limited amount of substantial disparity in the competencies displayed by male and female corporate executives.In addition, the region exhibits a noticeable lack regarding the attendance of WOCBs, as compared to their male counterparts.Another explanation for these findings is the lack of effective regulation of BGD by CG codes in areas where WOCBs are underrepresented.The studies conducted by Arora 2019) support these arguments.These studies have identified a weak, or insignificant relationship in their investigation of the influence of women's directorship on company performance in India, Pakistan, Latin America, and the Philippines.The varying outcomes of prior literature can be attributed to differences in data employed (Li & Chen, 2018), contexts (countries) (Fatma & Chouaibi, 2023), sample size (Rahman & Zahid, 2021), methodologies (Đặng et al., 2020), time periods (Attia et al., 2023), or measures of company performance (Mansour et al., 2022a), which is considered a practical gap in the gender literature that needs to be filled (Hazaea et al., 2023;Yu & Madison, 2021).However, there is a lack of knowledge about BGD in Jordan.Therefore, the validity of past studies conducted in various settings, CG structures, businesses, and sectors is doubtful.Most of the research on empirical investigations has concentrated on non-financial industries.The limited focus of the current literature inspired the current study in this field.
Thus, this analysis aims to establish the correlation between BGD and the market performance of the Jordanian banking sector from 2010 to 2022.

Sample selection and data collection
It is widely acknowledged that the banking sector in a country plays a crucial role in the financial system and economy (Berhe, 2023).Fatma .

Correlation analysis
Before the official empirical analysis, bivariate correlations were used to bring a preliminary insight into the associations between selected variables.By reporting the correlation matrix for the explained and explanatory variables, Table 3 confirms that the studied variables included in the model are proper, as they are not highly correlated.Consequently, the issue of multicollinearity did not pose a significant worry in the examination of correlations since none of the explanatory variables had coefficients above the threshold of 0.700 (Mansour et  Resultantly, this paper can elucidate the regression analysis results more with confidence.

Regression results
This section discusses the results of the pooled OLS regression, random-effect regression analysis, and robustness test on the panel data.

Pooled OLS regression
Initially, this study conducted the OLS regression.It presented the pooled OLS results for the bank performance equation in the first column of

Additional analysis
To confirm the durability the primary findings, this study undertook two additional analyses.

Alternative measure for the main explained variable
As a substitute measure of bank performance (Almarayeh, 2021;Fatma & Chouaibi, 2023), the present study relied on the ROA ratio as an accounting-based measure.The ratio used to calculate ROA compares a bank's annual net income to the average total assets during a fiscal year.The detailed analysis conducted by Brahma et al. (2021) highlighted the virtues of ROA as a reliable metric for operating performance.ROA considers firm size, unlike net income, enabling easier performance comparison between firms.Table 5 serves as further validation that the major discovery remains consistent overall.Note: *** P < 0.1, ** P < 0.05, and *P < 0.01.† P -insignificant.

Alternative measure for the main explanatory variable
To support the reliability of the current findings, this study references previous research conducted by Gharbi and Othman (2023).Additionally, an alternate measurement of BGD was utilized to strengthen the regression analysis (Mansour et al., 2023b), the ratio of female directorship on the bank's board (BGD %).Therefore, the more WOCBs there are, the more diverse it becomes.The current study calculates the number of women serving as directors on the bank board.Subsequently, the next step involves dividing it by the total board size to establish the percentage of BGD.Without any modifications, Table 6 portrays the identical findings.

DISCUSSION
Through an accomplished analysis, this article will comprehensively explain the findings and engage in an in-depth discussion of the results.4 demonstrate the impact of control variables on Tobin's Q.Generally, the results in Table 4 Column 3 align with the baseline findings in Table 4 columns 1 and 2.Moreover, this study utilized ROA as an alternative measure for Tobin's Q, while BGD% was adopted as an alternative measure for BGD.Table 4, Table 5, and Table 6 all showcase similar outcomes, with slight discrepancies.

CONCLUSION
This article analyzes the link between gender diversity and Jordanian bank performance.The study involved OLS, RE, and FE regression models.It informs a strong positive connection between BGD and market-based performance of listed banks in Jordan from 2010 to 2022.An increase in BGD by one unit raises Tobin-Q by up to 37.2 cents.Importantly, the study shows that BGD positively affects estab-lishing an effective governance framework, particularly board effectiveness, which significantly simulates decision-making, enhances managerial oversight, and directly affects banks' performance.This verifies the expectations of agency theory besides resource dependency theory and is consistent with the majority of global studies.Accordingly, increasing BGD in board banks ensures leaders cater to the interests of shareholders.These novel insights remain relevant to many sorts of alternative measures for both explained and explanatory factors.The outcomes of this empirical study expand the knowledge of CG in different domains.First, the study's findings exhibit that Jordanian banks can enhance their performance and address agency issues by prioritizing good governance practices, particularly by promoting gender diversity on boards.Additionally, it enhances our understanding of gender diversity in Jordan's banking industry by investigating the implementation of CG regulations in banks, a topic that previous research has overlooked to some extent.This study stands out by addressing this particular nexus and employing diverse identification and estimate methodologies to ensure accurate findings, thereby enhancing research methodology in developing countries.The current study's findings are undeniably vital for bank owners, top leadership, academics, and regulators in the ASE.To secure ongoing progress in bank performance, we advise banks to uphold gender equality and prioritize female members on bank boards, as this will foster increased performance.It is crucial to highlight the limitations of this study, such as the small sample size of Jordanian listed banks, which should be considered in subsequent quests.Future research should aim to expand the empirical attempts to other banking sectors in the MENA region.Moreover, utilizing the model in cross-national settings, especially in developing countries, may produce fresh perspectives.

Table 1 .
(Mansour et al., 2023b)Saha et al., 2023)3;Marei, 2023)3;Gharbi & Othmani, 2023;Marei, 2023)by relying on Tobin's Q as a market-based metric(Mansour et al., 2022b;Saha et al., 2023).It is calculated by adding the market value of stocks to the book value of debt and dividing it by the book value of total assets.Corporations with Tobin's Q over 1 are appealing to investors and offer strong investment prospects.On the other hand, Tobin's Q value lower than 1 implies an undervalued stock price resulting from inadequate asset management and limited investment growth, which reduces in-which suggests that female directors need to meet a certain threshold to have an impact on board effectiveness(Mansour et al., 2023b).Variable definitions 16)leh et al., 2022;Gharbi & Othmani, 2023) to their high level of regulation(Mansour et al., 2023b).By 2024, the Central Bank of Jordan (CBJ) mandated publicly listed banks to have 20% representation of WOCBs and 25% in CEO positions.Jordan's Central Bank Chief, Dr. Ziyad Fariz, made it clear that gender diversity in banks is vital for future progress and profitability(Mansour et al., 2023b).The study covers the years 2010 through 2022, during which there were 182 bank-year observations.This 13-year data period coincides with the implementation and recent reforms of the CG code in the Jordan(Mansour et al., 2022a).To collect data for the study, this study manually analyzed content by gathering pertinent information on explained, explanatory, and control variables from Jordan's listed banks' official websites and annual reports filed with the ASE.The data obtained throughout the research years met the study's goals and provided a balanced panel dataset.Finally, this study winsorized wholly variables except the dummy variables to mitigate potentially invalid effects of outliers (Al-Hiyari et al., 2024; Al-Zoubi & Sha'ban, 2023; Lutfi et al., 2022).2.2.Variable definitionsand measurement vestor interest(Brahma et al., 2021).The current study selected Tobin's Q as the measure of firm performance due to its widespread use in previous research on gender diversity(Bennouri et al., 2018).Accordingly, Tobin's Q is not only affected by a company's competitive advantage(Fatma & Chouaibi, 2023;Marei, 2022), but also by the competence of its corporate management(Hazaea et al., 2023).Consequently, it signifies the market's projections for a company's future profitability and the perception of investors toward its potential.In addition, Tobin's Q is less influenced by accounting practices and strategic manipulation of earnings compared with other metrics(Bennouri et al., 2018).BGD serves as the primary explanatory variable.The study quantifies BGD as the count of WOCBs.Besides, the current study incorporates the ratio of female directorship to male directors on the BOD as part of the robustness test(Arora & Soni, 2023;Gharbi & Othmani, 2023).This study includes both measures of female directors, following the practice of previous BGD literature (Saleh et al., 2020),2.3.Model specificationThis study employs the OLS method for panel data, a popular statistical tool in social sciences for hypothesis testing.Despite the limited number of firms, panel data offers a significant increase in sample size, which is its principal advantage(Saleh et al., 2022; Saleh & Mansour, 2024).By utilizing panel sets, the study gains more observations, resulting in influential statistical analysis.This paper conducted a comprehensive analysis of the correlation between BGD in Jordanian listed-banks and their market performance.The utilization of the baseline analysis model will yield valuable insights, giving us a comprehensive interpretation of this connection.To study the BGD-Tobin's Q nexus in the Jordanian banking sector research sample, a regression model for panel data is utilized.http://dx.doi.org/10.21511/bbs.19(1).2024.16

Table 4
, with Tobin's Q as the explained variable.This study hired Tobin's Q as an indicator of growth opportunities(Đặng et al., 2020), to assess market performance in Jordan's banking industry.

Table 4
This is evident from the coefficients shown in Table4.Table4shows that a one-unit change in BI, BM, LEV, SIZE, WOTM, and CAR, with all other variables held constant, results in Tobin's ders that the model can explain up to 72% of the variations in Tobin's Q among Jordanian-listed banks.Furthermore, the F-test results exhibit that the fitness of models is quite satisfactory.

Table 5 .
Regression results for BGD and accounting performance (ROA)

Table 6 .
Regression results for percentage of BGD and Tobin's Q ' performance in Table 4, column 3. The findings are consistent with Marquez-Cardenas et al. (2022) regarding the use of a fixedeffect model.The regression results in Column 3 of Table