Breaking glass ceilings or boardroom gridlock? Gender, independence and the new rules of MENA banking resilience

Purpose This study aims to investigate the critical tension between board independence and gender diversity in influencing the financial performance of banks in the Middle East and North Africa (MENA) region. It assesses whether formal independence translates into effective governance when combined with gender-inclusive structures within contexts of concentrated ownership, weak regulation and patriarchal norms. Design/methodology/approach Employing a 2-step system generalized method of moments estimator on a panel dataset (93 banks, 10 MENA countries, 2012–2024), the analysis controls for endogeneity and unobserved heterogeneity. Key variables include return on assets (ROA), Tobin's Q, board independence, gender diversity (Blau/Shannon indices, female proportion) and controls. Robustness tests address COVID periods and banking models (conventional/Islamic). Data sources: Bloomberg ESG, Orbis BankFocus and World Bank. Findings Independent directors significantly improve performance (e.g. +∼1.5pp ROA), especially in stable periods. Gender diversity enhances profitability beyond a 30% female threshold. However, high combined independence and diversity yield diminishing returns due to coordination challenges and cultural resistance. Environmental, social and governance (ESG) committees boost stable-period performance; chief executive officer duality and/or leverage harm it. Islamic banks show weaker governance links. Post-COVID, the positive effect of gender diversity's has been amplified. Research limitations/implications Exclusion of conflict-affected countries limits insights into extreme instability. Quantitative metrics miss informal power dynamics. Future research should integrate qualitative methods (e.g. board interviews). Practical implications Progressive gender quotas (30–50%) and nongovernmental organization partnerships could empower corporate social responsibility committees to align practices with sustainable development goals, particularly in rural finance. Social implications Increased gender inclusion challenges patriarchal structures and fosters innovation in inclusive finance (e.g. gender-targeted microloans and green credit). Originality/value The study uncovers a MENA governance paradox: independence and diversity individually enhance performance, but their intersection introduces inefficiencies. Integrating agency, institutional and resource dependence theories, it proposes a novel hybrid governance model balancing formal independence, culturally contextualized gender inclusion and ESG alignment for resilient emerging markets.