Dividend policy framework and bank risk-taking in Africa: do women inclusion in governance system offer new insight?

Daniel Ofori-Sasu (), Gloria Clarissa Dzeha (), Vera Ogeh Fiador () and Joshua Yindenaba Abor ()
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Daniel Ofori-Sasu: University of Ghana Business School
Gloria Clarissa Dzeha: Central University
Vera Ogeh Fiador: University of Ghana Business School
Joshua Yindenaba Abor: University of Ghana Business School

Future Business Journal, 2023, vol. 9, issue 1, 1-17

Abstract: Abstract This study examines the role of women included in governance system in explaining the impact of dividend policy framework on the risk-taking of banks, using a panel dataset of 52 African countries over the period, 2006–2020. The empirical outcome confirms that independent women on the board has a lower probability of paying dividend, reduce dividend yield and induce less risk-taking of banks while women in country-level governance position seek to protect the interest of shareholders and subsequently increase the likelihood of dividend payments and risk-taking of banks. The study found that banks that pay dividends face stricter market discipline, which in turn reduces banks' risk-taking. The study found that dividend policy framework generally acts as a complement for risk-taking when independent women are included in corporate boards while it acts as a substitute control device for banks’ risk-taking when women are included in country-level governance positions. Based on the net effects, the study found robust and strong evidence to support that the dividend policy framework reduces the risk-taking at higher level of women included in governance system.

Keywords: Women inclusion in governance system; Dividend policy; Risk-taking (search for similar items in EconPapers)
JEL-codes: D46 G3 G32 G35 G38 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1186/s43093-023-00264-7

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