The influence of powerful CEO and board gender diversity on the performance of Indian banks

Purpose This study aims to explore the influence of two major board attributes in terms of board gender diversity (BGD) and the presence of powerful chief executive officer (PCEO) on the performance of Indian banks measured as overall technical financial efficiency (OTFE). Design/methodology/approach The study includes 23 Indian banks for a longitudinal period of 14 years from 2005 to 2018. The study first measures the OTFE via a data envelopment analysis, thereafter, performs the fractional regression modelling along with robust estimates to ensure that the relationship establish via econometric modelling are stable, reliable and valid. Findings The findings reveal that PCEO and BGD can be instrumental to the performance; however, BGD to be effective needs a critical mass percentage on the board. However, the synthesis impact of BGD and PCEO posts a statistically significant negative influence on the performance of Indian banks. Practical implications Based on the findings, policymakers can encourage the critical mass presence of women directors on board, i.e. beyond fulfilling the mere legal compliance while simultaneously implement the balanced approach, in particular when the board is characterised by the consolidate presence of PCEO and BGD, to enhance the effectiveness of governance mechanism. Originality/value The novelty of the present endeavour lies in exploring the much under researched altering role of BGD on the relationship between PCEO and the performance of business. The study demonstrates that the BGD dimension must be approached with caution when PCEO governs the board.