The Effect of Board Characteristics on the Performance of Islamic Banks and the Moderating Effect of Innovation: Evidence From the UAE
Anil Pandey & Asma Houcine
What the paper says
This study examines the relationship between board characteristics, performance, and innovation in the United Arab Emirates (UAE) Islamic banks. The findings reveal that board characteristics impact bank performance. Larger boards contribute to better decision-making and improved performance. However, the board's educational background is associated with lower performance, suggesting that business-educated directors do not necessarily lead to improved performance. Furthermore, the results show that board gender diversity does not significantly impact banks’ performance, indicating that the benefits of gender diversity in enhancing performance may vary across different contexts and cultures. The study also explores the moderating role of innovation, confirming its positive effect on bank performance by improving operational efficiency. Innovation strengthens the positive impact of board size, making larger boards more effective. It also amplifies the value of directors’ business expertise, mitigating its previously negative effect. Furthermore, innovation offsets the adverse impact of gender diversity on performance, enabling diverse boards to foster more creative solutions and improve decision-making.
Evidence weight
Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40
| F · citation impact | 0.50 × 0.4 = 0.20 |
| M · momentum | 0.50 × 0.15 = 0.07 |
| V · venue signal | 0.50 × 0.05 = 0.03 |
| R · text relevance † | 0.50 × 0.4 = 0.20 |
† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.