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Purpose By bringing management in line with stakeholders’ interests, board diversity enhances company results and is essential to corporate governance. Palestine’s respectable sociocultural background shows more gender prejudice than in more developed environments. The purpose of this study is to examine the understudied topic of board gender diversity (BGD) and its impact on the performance of the Palestinian banking sector. Design/methodology/approach To analyse 132 bank-year observations for balanced longitudinal data analysis, this quantitative study uses fixed-effect, random and ordinary least squares (OLS) techniques. With these techniques, the BGD-Tobin’s Q nexus between 2013 and 2023 is established appropriately. To tackle the problems of endogeneity and robustness, the generalized method of moments (GMM) has also been used to analyse our primary findings regarding the effect of gender diversity on boards on the performance of the Palestinian banking sector. Findings Our results indicate that the model validates the positive correlation between BGD and market-based performance indicators. The results support the agency and resource dependency theories and highlight the significance of BGD in decision-making. Therefore, for every unit increase in BGD, Tobin’s Q measure increases by 42.3%. Furthermore, for each unit change in the capital adequacy ratio, board independence, size, meetings, and percentage of women in senior management, Tobin-Q will alter by 2.26, 28.7, 4.63, 46.7, 26.81 and 17.25%. Empirical results exhibit that board gender diversity has been gradually improving since 2013 in the banking sector in Palestine. Furthermore, this study found a significant impact of board diversity on the bank performance indicators. Research limitations/implications The primary limitations of this study should be emphasized. These include the small sample size of Palestinian banks that are listed on the Palestine Stock Exchange and the fact that some banks, in particular, did not provide complete disclosures every year. These issues should be taken into consideration in future studies. Practical implications The findings of this study provide implications for the Palestine Stock Exchange, academics, senior executives, practitioners and bank owners. Our findings urge banks to prioritize female representation on their boards and support gender equality to ensure continued improvement in bank performance. They provide insights for Palestinian banks to enhance their performance and address agency concerns by prioritizing good governance practices and promoting gender diversity on boards. The findings enhance our understanding of gender diversity in the banking industry in Palestine by investigating the implementation of corporate governance regulations in banks, an area that has not received attention in previous research. Originality/value This paper offers theoretical insights into how bank performance is enhanced by gender diversity on boards. Theoretical implications of the findings contribute to the expansion of our knowledge of corporate governance in various fields. This study provides insights into the value of board gender diversity for improving the performance of the banking industry in Palestine for CEOs, stakeholders, bank managers and governing bodies. This paper adds to and expands the existing literature on the benefits of board gender diversity for banks’ financial performance and success in the Palestinian context, which is unique in its business nature and different from other contexts in the region.
Badwan et al. (Thu,) studied this question.