Financial Management Effectiveness and Board Gender Diversity in Member-Governed, Community Financial Institutions
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Although non-profit organisations typically have high representation of females on their boards, relatively little is known about the effects of gender diversity in these organisations particularly in relation to financial management. In this archival study, resource dependency theory and agency analysis are combined to provide theoretical insight and empirical analysis of gender diversity on effective financial management in member-governed, community financial institutions. The investigation is possible due to the unique characteristics of the organisational form and region being examined—credit unions in Northern Ireland. The sector has not been subject to external regulation on board gender, yet a wide array of gender mix on boards ranging from 100 % male to 100 % female are in existence. In addition, effective financial management is crucial to their survival and their ability to meet member objectives. Boards with higher female representation exhibit superior financial management first, in respect of loan book quality in the period of austerity following the financial crisis and second when measured against return on assets.
KeywordsAgency Credit unions Financial management Gender diversity Governance Non-profits Resource dependence theory
We are grateful for financial support provided by the Irish Accounting Education Trust (Chartered Accountants Ireland) and for the very helpful comments received from three anonymous reviewers, from Barry Reilly and Catherine Seierstad, from seminar participants when the paper was presented at the Universities of Ulster and Sussex and from conference participants at the 2013 conferences of the British Accounting and Finance Association, the Academy of Management, the Irish Accounting and Finance Association and the EIASM 9th Workshop on Challenges in Managing the Third Sector.
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