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

Abstract

PurposeThis paper aims to examine the determinants of the dividend distribution policy in a banking setting.Design/methodology/approachUsing 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.FindingsWe 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 implicationsOur findings have practical implications for shareholders, managers and financial analysts as they suggest rationalizing dividend distribution strategies.Originality/valueOur study contributes to the growing body of knowledge on dividend policy, gender diversity and Islamic banks.