Financial Management Effectiveness and Board Gender Diversity in Member-Governed, Community Financial Institutions

Anne-Marie Ward, John Forker

Research output: Contribution to journalArticle

9 Citations (Scopus)

Abstract

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.
LanguageEnglish
JournalJournal of Business Ethics
VolumeOnline
DOIs
Publication statusPublished - 30 May 2015

Fingerprint

financial management
gender
community
dependency theory
non-profit-organization
financial crisis
loan
credit
assets
regulation
Financial management
Gender diversity
Management effectiveness
Financial institutions
Financial Management
Management Effectiveness
ability
resources

Keywords

  • Gender diversity
  • Credit union
  • nonprofit management
  • agency theory
  • financial efficiency
  • resource dependence theory.

Cite this

@article{8f3055d1a145451bbcf82ea8e2e7cf3f,
title = "Financial Management Effectiveness and Board Gender Diversity in Member-Governed, Community Financial Institutions",
abstract = "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.",
keywords = "Gender diversity, Credit union, nonprofit management, agency theory, financial efficiency, resource dependence theory.",
author = "Anne-Marie Ward and John Forker",
note = "Reference text: Adams, R., & Ferreira, D. (2007). A theory of friendly boards. Journal of Finance, 62, 217–250. Adams, R., & Ferreira, D. (2009). Women in the boardroom and their impact on governance and performance. Journal of Financial Economics, 94(2), 291–309. Adams, R., Hermalin, B., & Weisbach, M. (2010). The role of boards of directors in corporate governance: A conceptual framework and survey. Journal of Economic Literature, 48, 58–107. Adams, R., de Haan, J., Terjesen, S., & van Ees, H. (2015). Board diversity: Moving the field forward. Corporate Governance: An International Review, 23(2), 77–82. Ali, M., Ng, Y. L., & Kulik, C. T. (2014). Board age and gender diversity: A test of competing linear and curvilinear predictions. Journal of Business Ethics, 125, 497–512. Amel, D. F., & Prager, R. A. (2014). Community bank performance: How important are managers., Finance and economics discussion series Washington, DC: Division of Research & Statistics and Monetary Affairs Federal Reserve Board. Andre´s-Alonso, P., Azofra-Palenzuela, V., & Romero-Merino, E. (2009). Determinants of nonprofit board size and composition: The case of Spanish foundations. Nonprofit and Voluntary Sector Quarterly, 38(5), 784–809. Barron, D. N., West, E., & Hannon, M. T. (1994). A time to grow and a time to die: growth and mortality of credit unions in New York City, 1914–1990. American Journal of Sociology, 100(2), 381–421. Bear, S., Rahman, N., & Post, C. (2010). The impact of board diversity and gender composition on corporate social responsibility and firm reputation. Journal of Business Ethics, 97(2), 207–221. Bowles, S., & Gintis, H. (2002). Social capital and community governance. The Economic Journal, 112(483), F419–F436. Bradshaw, P., Murray, V., & Wolpin, J. (1992). Do nonprofit boards make a difference? An exploration of the relationship among board structure, process, and effectiveness. Nonprofit and Voluntary Sector Quarterly, 21(3), 227–249. Bradshaw, P., Murray, V., & Wolpin, J. (1996). Women on boards of nonprofits: What difference do they make? Non-profit Management and Leadership, 6(3), 241–254. Brammer, S., Millington, A., & Pavelin, S. (2009). Corporate reputation and women on the board. British Journal of Management, 20(1), 17–29. Brown, W. A. (2005). Exploring the association between board and organizational performance in non-profit organizations. Nonprofit Management and Leadership, 15(3), 317–339. Callen, J. L., Klein, A., & Tinkelman, D. (2003). Board composition, committees, and organizational efficiency: The case of nonprofits. Nonprofit and Voluntary Sector Quarterly, 32(4), 493–520. Callen, J. L., Klein, A., & Tinkelman, D. (2010). The contextual impact of nonprofit board composition and structure on organizational performance: Agency and resource dependence perspectives. Voluntas, 21(1), 101–125. Campbell, K., & Mı´nguez-Vera, A. (2008). Gender diversity in the boardroom and firm financial performance. Journal of Business Ethics, 83(3), 435–451. Carter, D. A., Simkins, B. J., & Simpson, W. G. (2003). Corporate governance, board diversity and firm value. The Financial Review, 38(1), 33–35. Carter, D. A., D’Souza, F., Simkins, B. J., & Simpson, W. G. (2010). The gender and ethnic diversity of US board committees and firm financial performance. Corporate Governance: An International Review, 18(5), 396–414. Chen, L. (2004). Membership incentives: Factors affecting individuals’ decisions about participation in athletics-related professional associations. Journal of Sport Management, 18(2), 111–131. Conry, J. C., & McDonald, J. E. (1994). Moving towards a matrix: Gender and the nonprofit culture of the nineties. New Directions for Philanthropic Fundraising, 5, 45–53. A. M. Ward, J. Forker 123 Coombes, S. M., Morris, M. H., Allen, J. A., & Webb, J. W. (2011). Behavioural orientations of non-profit boards as a factor in entrepreneurial performance: Does governance matter? Journal of Management Studies, 48(4), 829–856. Cornforth, C. (2012). Nonprofit governance research: Limitations of the focus on boards and suggestions for new directions. Nonprofit and Voluntary Sector Quarterly, 41(6), 1116–1135. Croteau, J. T. (1963). The economics of the Credit Union. Detroit: Wayne State University Press. Dalton, D. R., Daily, C., Johnson, J. L., & Ellstrand, M. (1999). Number of directors and financial performance: A meta-analysis. Academy of Management Journal, 42(6), 674–686. Davis, K. (2007).Australian credit unions and the demutualization agenda. Annals of Public and Cooperative Economics, 78(2), 277–300. Dekker, P., & van den Broek, A. (1998). Civil society in comparative perspective: Involvement in voluntary associations in North America and Western Europe. Voluntas, 9(1), 11–38. Dunn, P. (2012). The role of gender and human capital on the appointment of new corporate directors to boardroom committees: Canadian evidence. International Business Research, 5(5), 16–25. Eisenhardt, K. M. (1989). Agency theory: An assessment and review. The Academy of Management Review, 14(1), 57–74. Farrell, K. A.,&Hersch, P. L. (2005). Additions to corporate boards: The effect of gender. Journal of Corporate Finance, 11(1–2), 85–106. Ferreira, D. (2010). Board diversity. In R. Anderson & H. K. Baker (Eds.), Corporate Governance: A synthesis of theory, research, and practice (pp. 225–242). Hoboken, NJ: Wiley. Forker, J. J., & Ward, A. M. (2012). Prudence and financial selfregulation in credit unions in Northern Ireland. The British Accounting Review, 44(4), 221–235. Forker, J. J., Grosvold, J., & Ward, A. M. (2014). Management models and priorities in member associations: Is credit unions’ community involvement crowded-out? Nonprofit and Voluntary Sector Quarterly, 43(2S), 105S–123S. Francoeur, C., Labelle, R., & Sinclair-Desgagne´, B. (2008). Gender diversity in corporate governance and top management. Journal of Business Ethics, 81(1), 83–95. Granovetter, M. S. (1985). Economic action and social structure: the problem of embeddedness. American Journal of Sociology, 91(3), 481–510. Hafsi, T., & Turgut, G. (2013). Boardroom diversity and its effect on social performance: Conceptualization and empirical evidence. Journal of Business Ethics, 112(3), 463–479. Harrison, D., Price, K., & Bell, M. (1998). Beyond relational demography: Time and the effects of surface-and deep-level diversity on work group cohesion. Academy of Management Journal, 41(1), 96–107. Hartarska, V., & Nadolnyak, D. (2012). Board size and diversity as governance mechanisms in community development loan funds in the USA. Applied Economics, 44(33), 4313–4329. Heinrich, J., & Kashian, R. (2008). Credit union to mutual conversion: Do interest rates converge? Contemporary Economic Policy, 26(1), 107–117. Herman, R. D., & Renz, D. O. (2004). Doing things right: effectiveness in local nonprofit organisations, a panel study. Public Administration Review, 64(6), 694–705. Hill, C. W. L., & Jones, T. M. (1992). Stakeholder-agency theory. Journal of Management Studies, 29(2), 131–154. Hillier, D., Hodgson, A., Stevenson-Clarke, P., & Lhaopadchan, S. (2008). Accounting window dressing and template regulation: A case study of the Australian credit union industry. Journal of Business Ethics, 83(3), 579–593. Hillman, A. J., Cannella, A. A., & Paetzold, R. L. (2000). The resource dependency role of corporate directors: Strategic adoption of board composition in response to environmental change. Journal of Management Studies, 37(2), 235–255. Hillman, A. J., Cannella, A. A, Jr, & Harris, I. C. (2002). Women and racial minorities in the boardroom: How do directors differ? Journal of Management, 28(6), 747–763. Ibarra, H. (1992). Homophily and differential returns: Sex differences in network structure and access in an advertising firm. Administrative Science Quarterly, 37(3), 422–447. Ibarra, H. (1993). Personal networks of women and minorities in management: A conceptual framework. Academy of Management Review, 18(1), 56–87. ILCU (2010). Standard rules for credit unions (Northern Ireland). Dublin: ILCU. Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behaviour, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360. Kesner, I. F. (1988). Directors’ characteristics and committee membership: An investigation of type, occupation, tenure and gender. Academy of Management Journal, 31(1), 66–84. Kupiec, P. & Lee, Y. (2012). What factors explain differences in return on assets among community banks? Federal Deposit Insurance Corporation FDIC (working paper). Landrum, N. (2007). Advancing the ‘base of the pyramid’ debate. Strategic Management Review, 1(1), 1–12. Lau, D. C., & Murnighan, J. K. (1998). Demographic diversity and faultlines: The compositional dynamics and organisational groups. Academy of Management Review, 23(2), 325–340. Luckerath-Rovers, M. (2013). Women on boards and firm performance. Journal of Management and Governance, 17(2), 491–509. Luis-Carnicer, P., Martı´nez-Sa´nchez, A., Pe´rez-Pe´rez, M., & Vela- Jime´nez, M. J. (2008). Gender diversity in management: Curvilinear relationships to reconcile findings. Gender in Management: An International Journal, 23(8), 583–597. Mallin, C. A. (2010). Corporate governance. Oxford: Oxford University Press. McKillop, D. G., Briscoe, R., McCarthy, O., & Ward, M. (2003). Irish credit unions: Exploring the gender mix. International Journal of Voluntary and Non-Profit Organisations, 14(3), 339–358. McKillop, D. G., Glass, C., & Ward, A. M. (2005). Cost efficiency, environmental influences and UK credit unions, 1991 to 2001. Managerial Finance, 31(11), 72–86. McKillop, D. G., Goth, P., & Hyndman, N. (2006). Credit unions in Ireland: Structure performance and governance. Dublin: Institute of Chartered Accountants in Ireland. McKillop, D. G., Ward, A. M., & Wilson, J. (2010). The good, the bad and the ugly: A discussion of the impact of regulatory reform on the UK credit union sector. Edinburgh, Scotland: SATER (The Scottish Accountancy Trust for Education and Research). Midgley, J. (2006). Gendered economies: Transferring private gender roles into the public realm through rural community development. Journal of Rural Studies, 22(2), 217–231. Miller-Millesen, J. L. (2003). Understanding the behaviour of nonprofit boards of directors: A theory-based approach. Nonprofit and Voluntary Sector Quarterly, 32(4), 521–547. Niederkohr, K. & Ikeda, J. (2005). Credit union governance: White paper. WOCCU, pp. 1–12. Nielsen, S., & Huse, M. (2010). Women directors’ contribution to board decision-making and strategic involvement: The role of equality perception. European Management Review, 7(1), 16–29. Ostrower, F., & Stone, M. M. (2010). Moving governance research forward: A contingency-based framework and data application. Nonprofit and Voluntary Sector Quarterly, 39(5), 901–924. Pajunen, K. (2006). Stakeholder influences in organizational survival. Journal of Management Studies, 43(6), 1261–1288. Peterson, C. A., & Philpot, J. (2007). Women’s roles on US Fortune 500 boards: Director expertise and committee membership. Journal of Business Ethics, 72(2), 177–196. Financial Management Effectiveness and Board Gender Diversity in Member-Governed, Community… 123 Pfeffer, J., & Salancik, G. R. (1978). The external control of organizations: a resource dependence perspective. New York: Harper and Row. Reddy, K., Locke, S., & Fauzi, F. (2013). Relevance of corporate governance practices in charitable organisations: A case study of registered charities in New Zealand. International Journal of Managerial Finance, 9(2), 110–132. Rose, C. (2007). Does female board representation influence firm performance? The Danish evidence. Corporate Governance: An International Review, 15(2), 404–413. Savage, G. T., Nix, T. W., Whitehead, C. J., & Blair, J. D. (1991). Strategies for assessing and managing organizational stakeholders. Academy of Management Executive, 5(2), 61–75. Shaiko, R. G. (1997). Female participation in association governance and political representation: Women as executive directors, board members, lobbyists and political action committee directors. Non-Profit Management and Leadership, 8(2), 121–139. Shrader, C., Blackburn, V., & Iles, P. (1997). Women in management and firm financial performance: An exploratory study. Journal of Management Issues, 9(3), 355–372. Siciliano, J. L. (1996). The relationship of board member diversity to organisational performance. Journal of Business Ethics, 15(4), 1313–1320. Silverman, I. W. (2003). Gender difference in delay of gratification: A meta-analysis. Sex Roles, 49(9–10), 451–463. Singh, V., Terjesen, S., & Vinnicombe, S. (2008). Newly appointed directors in the boardroom: How do women and men differ? European Management Journal, 26(1), 48–58. Stone, M. M., & Ostrower, F. (2007). Acting in the public interest? Another look at governance research in nonprofit organisations. Nonprofit and Voluntary Sector Quarterly, 36(3), 416–438. Themudo, N. S. (2009). Gender and the nonprofit sector. Nonprofit and Voluntary Sector Quarterly, 38(4), 663–683. Van Puyvelde, S., Caers, R., Du Bois, C., & Jegers, M. (2012). The governance of nonprofit organizations: Integrating agency theory with stakeholder and stewardship theories. Nonprofit and Voluntary Sector Quarterly, 41(3), 431–451. Ward, A. M., & McKillop, D. G. (2005). An investigation into the link between UK credit union characteristics, location and their success. Annals of Public and Cooperative Economics, 76(3), 461–489. Williams, K. Y., & O’Reilly, C. A. (1998). Demography and diversity in organizations: A review of 40 years of research. In B. Staw & R. Sutton (Eds.), Research in organizational behavior (Vol. 20, pp. 77–140). Greenwich, CT: JAI Press Inc. Wilson, J., & Musick, M. (1997). Who cares? Toward an integrated theory of volunteer work. American Sociological Review, 62(5), 694–713. Wiseman, R. M., Cuevas-Rodrı´guez, G., & Gomez-Mejia, L. R. (2012). Towards a social theory of agency. Journal of Management Studies, 49(1), 202–222. WOCCU. (2013). Statistical report 2013.World Council of CreditUnions website. Retrieved Oct 20, 2014 from http://www.woccu.org. Yermack, D. (1996). Higher market valuation of companies with a small board of directors’. Journal of Financial Economics, 40(1), 185–212. A. M. Ward, J. Forker",
year = "2015",
month = "5",
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doi = "10.1007/s10551-015-2699-9",
language = "English",
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journal = "Journal of Business Ethics",
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T1 - Financial Management Effectiveness and Board Gender Diversity in Member-Governed, Community Financial Institutions

AU - Ward, Anne-Marie

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N1 - Reference text: Adams, R., & Ferreira, D. (2007). A theory of friendly boards. Journal of Finance, 62, 217–250. Adams, R., & Ferreira, D. (2009). Women in the boardroom and their impact on governance and performance. Journal of Financial Economics, 94(2), 291–309. Adams, R., Hermalin, B., & Weisbach, M. (2010). The role of boards of directors in corporate governance: A conceptual framework and survey. Journal of Economic Literature, 48, 58–107. Adams, R., de Haan, J., Terjesen, S., & van Ees, H. (2015). Board diversity: Moving the field forward. Corporate Governance: An International Review, 23(2), 77–82. Ali, M., Ng, Y. L., & Kulik, C. T. (2014). Board age and gender diversity: A test of competing linear and curvilinear predictions. Journal of Business Ethics, 125, 497–512. Amel, D. F., & Prager, R. A. (2014). Community bank performance: How important are managers., Finance and economics discussion series Washington, DC: Division of Research & Statistics and Monetary Affairs Federal Reserve Board. Andre´s-Alonso, P., Azofra-Palenzuela, V., & Romero-Merino, E. (2009). Determinants of nonprofit board size and composition: The case of Spanish foundations. Nonprofit and Voluntary Sector Quarterly, 38(5), 784–809. Barron, D. N., West, E., & Hannon, M. T. (1994). A time to grow and a time to die: growth and mortality of credit unions in New York City, 1914–1990. American Journal of Sociology, 100(2), 381–421. Bear, S., Rahman, N., & Post, C. (2010). The impact of board diversity and gender composition on corporate social responsibility and firm reputation. Journal of Business Ethics, 97(2), 207–221. Bowles, S., & Gintis, H. (2002). Social capital and community governance. The Economic Journal, 112(483), F419–F436. Bradshaw, P., Murray, V., & Wolpin, J. (1992). Do nonprofit boards make a difference? An exploration of the relationship among board structure, process, and effectiveness. Nonprofit and Voluntary Sector Quarterly, 21(3), 227–249. Bradshaw, P., Murray, V., & Wolpin, J. (1996). Women on boards of nonprofits: What difference do they make? Non-profit Management and Leadership, 6(3), 241–254. Brammer, S., Millington, A., & Pavelin, S. (2009). Corporate reputation and women on the board. British Journal of Management, 20(1), 17–29. Brown, W. A. (2005). Exploring the association between board and organizational performance in non-profit organizations. Nonprofit Management and Leadership, 15(3), 317–339. Callen, J. L., Klein, A., & Tinkelman, D. (2003). Board composition, committees, and organizational efficiency: The case of nonprofits. Nonprofit and Voluntary Sector Quarterly, 32(4), 493–520. Callen, J. L., Klein, A., & Tinkelman, D. (2010). The contextual impact of nonprofit board composition and structure on organizational performance: Agency and resource dependence perspectives. Voluntas, 21(1), 101–125. Campbell, K., & Mı´nguez-Vera, A. (2008). Gender diversity in the boardroom and firm financial performance. Journal of Business Ethics, 83(3), 435–451. Carter, D. A., Simkins, B. J., & Simpson, W. G. (2003). Corporate governance, board diversity and firm value. The Financial Review, 38(1), 33–35. Carter, D. A., D’Souza, F., Simkins, B. J., & Simpson, W. G. (2010). The gender and ethnic diversity of US board committees and firm financial performance. Corporate Governance: An International Review, 18(5), 396–414. Chen, L. (2004). Membership incentives: Factors affecting individuals’ decisions about participation in athletics-related professional associations. Journal of Sport Management, 18(2), 111–131. Conry, J. C., & McDonald, J. E. (1994). Moving towards a matrix: Gender and the nonprofit culture of the nineties. New Directions for Philanthropic Fundraising, 5, 45–53. A. M. Ward, J. Forker 123 Coombes, S. M., Morris, M. H., Allen, J. A., & Webb, J. W. (2011). Behavioural orientations of non-profit boards as a factor in entrepreneurial performance: Does governance matter? Journal of Management Studies, 48(4), 829–856. Cornforth, C. (2012). Nonprofit governance research: Limitations of the focus on boards and suggestions for new directions. Nonprofit and Voluntary Sector Quarterly, 41(6), 1116–1135. Croteau, J. T. (1963). The economics of the Credit Union. Detroit: Wayne State University Press. Dalton, D. R., Daily, C., Johnson, J. L., & Ellstrand, M. (1999). Number of directors and financial performance: A meta-analysis. Academy of Management Journal, 42(6), 674–686. Davis, K. (2007).Australian credit unions and the demutualization agenda. Annals of Public and Cooperative Economics, 78(2), 277–300. Dekker, P., & van den Broek, A. (1998). Civil society in comparative perspective: Involvement in voluntary associations in North America and Western Europe. Voluntas, 9(1), 11–38. Dunn, P. (2012). The role of gender and human capital on the appointment of new corporate directors to boardroom committees: Canadian evidence. International Business Research, 5(5), 16–25. Eisenhardt, K. M. (1989). Agency theory: An assessment and review. The Academy of Management Review, 14(1), 57–74. Farrell, K. A.,&Hersch, P. L. (2005). Additions to corporate boards: The effect of gender. Journal of Corporate Finance, 11(1–2), 85–106. Ferreira, D. (2010). Board diversity. In R. Anderson & H. K. Baker (Eds.), Corporate Governance: A synthesis of theory, research, and practice (pp. 225–242). Hoboken, NJ: Wiley. Forker, J. J., & Ward, A. M. (2012). Prudence and financial selfregulation in credit unions in Northern Ireland. The British Accounting Review, 44(4), 221–235. Forker, J. J., Grosvold, J., & Ward, A. M. (2014). Management models and priorities in member associations: Is credit unions’ community involvement crowded-out? Nonprofit and Voluntary Sector Quarterly, 43(2S), 105S–123S. Francoeur, C., Labelle, R., & Sinclair-Desgagne´, B. (2008). Gender diversity in corporate governance and top management. Journal of Business Ethics, 81(1), 83–95. Granovetter, M. S. (1985). Economic action and social structure: the problem of embeddedness. American Journal of Sociology, 91(3), 481–510. Hafsi, T., & Turgut, G. (2013). Boardroom diversity and its effect on social performance: Conceptualization and empirical evidence. Journal of Business Ethics, 112(3), 463–479. Harrison, D., Price, K., & Bell, M. (1998). Beyond relational demography: Time and the effects of surface-and deep-level diversity on work group cohesion. Academy of Management Journal, 41(1), 96–107. Hartarska, V., & Nadolnyak, D. (2012). Board size and diversity as governance mechanisms in community development loan funds in the USA. Applied Economics, 44(33), 4313–4329. Heinrich, J., & Kashian, R. (2008). Credit union to mutual conversion: Do interest rates converge? Contemporary Economic Policy, 26(1), 107–117. Herman, R. D., & Renz, D. O. (2004). Doing things right: effectiveness in local nonprofit organisations, a panel study. Public Administration Review, 64(6), 694–705. Hill, C. W. L., & Jones, T. M. (1992). Stakeholder-agency theory. Journal of Management Studies, 29(2), 131–154. Hillier, D., Hodgson, A., Stevenson-Clarke, P., & Lhaopadchan, S. (2008). Accounting window dressing and template regulation: A case study of the Australian credit union industry. Journal of Business Ethics, 83(3), 579–593. Hillman, A. J., Cannella, A. A., & Paetzold, R. L. (2000). The resource dependency role of corporate directors: Strategic adoption of board composition in response to environmental change. Journal of Management Studies, 37(2), 235–255. Hillman, A. J., Cannella, A. A, Jr, & Harris, I. C. (2002). Women and racial minorities in the boardroom: How do directors differ? Journal of Management, 28(6), 747–763. Ibarra, H. (1992). Homophily and differential returns: Sex differences in network structure and access in an advertising firm. Administrative Science Quarterly, 37(3), 422–447. Ibarra, H. (1993). Personal networks of women and minorities in management: A conceptual framework. Academy of Management Review, 18(1), 56–87. ILCU (2010). Standard rules for credit unions (Northern Ireland). Dublin: ILCU. Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behaviour, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360. Kesner, I. F. (1988). Directors’ characteristics and committee membership: An investigation of type, occupation, tenure and gender. Academy of Management Journal, 31(1), 66–84. Kupiec, P. & Lee, Y. (2012). What factors explain differences in return on assets among community banks? Federal Deposit Insurance Corporation FDIC (working paper). Landrum, N. (2007). Advancing the ‘base of the pyramid’ debate. Strategic Management Review, 1(1), 1–12. Lau, D. C., & Murnighan, J. K. (1998). Demographic diversity and faultlines: The compositional dynamics and organisational groups. Academy of Management Review, 23(2), 325–340. Luckerath-Rovers, M. (2013). Women on boards and firm performance. Journal of Management and Governance, 17(2), 491–509. Luis-Carnicer, P., Martı´nez-Sa´nchez, A., Pe´rez-Pe´rez, M., & Vela- Jime´nez, M. J. (2008). Gender diversity in management: Curvilinear relationships to reconcile findings. Gender in Management: An International Journal, 23(8), 583–597. Mallin, C. A. (2010). Corporate governance. Oxford: Oxford University Press. McKillop, D. G., Briscoe, R., McCarthy, O., & Ward, M. (2003). Irish credit unions: Exploring the gender mix. International Journal of Voluntary and Non-Profit Organisations, 14(3), 339–358. McKillop, D. G., Glass, C., & Ward, A. M. (2005). Cost efficiency, environmental influences and UK credit unions, 1991 to 2001. Managerial Finance, 31(11), 72–86. McKillop, D. G., Goth, P., & Hyndman, N. (2006). Credit unions in Ireland: Structure performance and governance. Dublin: Institute of Chartered Accountants in Ireland. McKillop, D. G., Ward, A. M., & Wilson, J. (2010). The good, the bad and the ugly: A discussion of the impact of regulatory reform on the UK credit union sector. Edinburgh, Scotland: SATER (The Scottish Accountancy Trust for Education and Research). Midgley, J. (2006). Gendered economies: Transferring private gender roles into the public realm through rural community development. Journal of Rural Studies, 22(2), 217–231. Miller-Millesen, J. L. (2003). Understanding the behaviour of nonprofit boards of directors: A theory-based approach. Nonprofit and Voluntary Sector Quarterly, 32(4), 521–547. Niederkohr, K. & Ikeda, J. (2005). Credit union governance: White paper. WOCCU, pp. 1–12. Nielsen, S., & Huse, M. (2010). Women directors’ contribution to board decision-making and strategic involvement: The role of equality perception. European Management Review, 7(1), 16–29. Ostrower, F., & Stone, M. M. (2010). Moving governance research forward: A contingency-based framework and data application. Nonprofit and Voluntary Sector Quarterly, 39(5), 901–924. Pajunen, K. (2006). Stakeholder influences in organizational survival. Journal of Management Studies, 43(6), 1261–1288. Peterson, C. A., & Philpot, J. (2007). Women’s roles on US Fortune 500 boards: Director expertise and committee membership. Journal of Business Ethics, 72(2), 177–196. Financial Management Effectiveness and Board Gender Diversity in Member-Governed, Community… 123 Pfeffer, J., & Salancik, G. R. (1978). The external control of organizations: a resource dependence perspective. New York: Harper and Row. Reddy, K., Locke, S., & Fauzi, F. (2013). Relevance of corporate governance practices in charitable organisations: A case study of registered charities in New Zealand. International Journal of Managerial Finance, 9(2), 110–132. Rose, C. (2007). Does female board representation influence firm performance? The Danish evidence. Corporate Governance: An International Review, 15(2), 404–413. Savage, G. T., Nix, T. W., Whitehead, C. J., & Blair, J. D. (1991). Strategies for assessing and managing organizational stakeholders. Academy of Management Executive, 5(2), 61–75. Shaiko, R. G. (1997). Female participation in association governance and political representation: Women as executive directors, board members, lobbyists and political action committee directors. Non-Profit Management and Leadership, 8(2), 121–139. Shrader, C., Blackburn, V., & Iles, P. (1997). Women in management and firm financial performance: An exploratory study. Journal of Management Issues, 9(3), 355–372. Siciliano, J. L. (1996). 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PY - 2015/5/30

Y1 - 2015/5/30

N2 - 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.

AB - 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.

KW - Gender diversity

KW - Credit union

KW - nonprofit management

KW - agency theory

KW - financial efficiency

KW - resource dependence theory.

U2 - 10.1007/s10551-015-2699-9

DO - 10.1007/s10551-015-2699-9

M3 - Article

VL - Online

JO - Journal of Business Ethics

T2 - Journal of Business Ethics

JF - Journal of Business Ethics

SN - 0167-4544

ER -