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Board Diversity in European Banks: The influence of corporate governance, bank characteristics, and performance Discussion by Patrick Verwijmeren Erasmus School of Economics

Summary  Research question: “we investigate the impact of banking industry regulations, financial performance, and financial fragility on board diversity”  Board diversity means gender diversity  Findings : “ appointing additional female directors may improve the financial performance of EU banks ”

Overall  Highly relevant topic  Part of a stream of new literature  Data: 65 listed European banks over 2004-2012  Countries with different levels of female representation on boards  Crisis and non-crisis periods

Comments: Contribution of this paper’s sample  There are already many studies on diversity, also for banks. Claimed advantages of this study:  Does not include private banks (smaller, less transparent)  Focusing on more countries  What do we expect to be different now?  Does female behavior differ among countries?  Forced diversity versus preferred diversity!

Comments: Having an opinion  “Farrell and Hersch (2005) argue that the over-representation of women with multiple directorships may imply a limited number of qualified candidates. We disagree with this argument, as we believe that women are generally as well qualified and as well educated as men.”

Comments: Findings  “appointing additional female directors may improve the financial performance of EU banks” ROA ROA Tobin’s Tobin’s Q Q % Female -0.008 -0.019 -0.066 -0.143 % Female 0.0001 0.001 squared

Further discussion  Governance and gender diversity:  Complements or substitutes?  Sensitivity to outside pressure  Risk-taking might be good in times of economic growth

Conclusion  Very relevant topic  The paper definitely has potential  Improved discussions of contribution and results would help the paper