Technical efficiency in the Ghanaian banking sector: does boardroom gender diversity matter?

Abstract

Purpose: The marginalization of women on boards is a heavily discussed topic across the world. especially in Ghana. Apart from estimating the link between boardroom gender diversity and technical efficiency of banks, this study aims to test the presence of upper-echelons theory in the Ghanaian banking sector. Design/methodology/approach – The study examines data from the 2000–2019 annual reports of 23 banks in Ghana. The stochastic frontier analysis is used to estimate the impact of boardroom gender diversity in technical efficiency of banks in Ghana. Findings: This study finds that greater boardroom gender diversity generates technical efficiencies for banks. The results remain unchanged after accounting for bank types (listed and non-listed). Thus, all banks benefit in terms of technical efficiency from more boardroom gender diversity. The upper echelons theory is validated in the Ghanaian banking context. Overall, the study supports pro-gender diversity on boards. Practical implications: The results have implications at corporate, social and national levels. It supports the need for policies that improve greater boardroom gender diversity. Originality/value: This study adds to the growing number of non-developed countries by investigating the link between the boardroom gender diversity and technical efficiency of banks in Ghana, a country which historically has had minimal female participation in the workforce. New insight is, therefore, offered into this relationship by using data which examines the technical efficiency of banks periods before and after the Women in Finance Charter in 2016.