Corporate governance is a means by which society can make sure that the business is well run, from which investors can be invested into the company. Good corporate governance brings long-term benefits for the company in enhancing the image and prestige, easy to mobilize funds at a low cost. At the national level, good corporate governance also provides good image of a transparent investment environment and safety. The result in table 1 shows that in Vietnamese bank governance, the average proportion of women was 24.88%, it is low rate. The banks should arrange more women on board in order to balance gender diversity in corporate governance. And make corporate governance stronger. In current study, with Vietnamese environment and quantitative method, the researcher proposed two hypotheses: Hypothesis 1: There is a positive relationship between the proportions of Women on the boards (percentage of woman manager) to Firm performance (measured by Return on Equity). Hypothesis 2: There is a positive relationship between the proportions of Women on the boards (percentage of woman manager) to Firm performance (measured by Tobin’s Q). The result shows that Women on the board have positive relationship with firm performance (measure by ROE) but negative relationship with market based on financial performance (Tobin’s Q). Thought those results, the researcher proposed some suggestions following: Intensifying proportion of women on corporate governance in order to improve Effective Corporation of bank. According to the result found in table 5, proportion of women on board has positive with return on equity (B=0.78), so if bank has one more women on board, effective operation will increase at 0.78 ( in the condition that other factors are not change). Although the results found shows that in Vietnamese bank, the higher proportion of women on board, the higher return on equity. But in table 6, the higher women on board, the lower Tobin’s Q. Tobin's q is the ratio between the market value and replacement value of the same physical assets (James Tobin, 1968). The bank have large proportion of women may not decrease attracting the investors because of their psychology or behavior. Corporate governance creates safeguards, limitations mismanagement, attracted outside capital and improve confidence in the business. For investors buying securities and trust, they need to ensure that the business will be operated honestly and transparently. Hence, if the governance is not good, the investors will not be believed in company, and they will not concern about investing, so stock price will decrease, the firm performance will go down. That reason shows that the woman is not only the factor which makes Tobin’s Q went down. Through two analyses below, we see the woman is very important and effecting bank performance. From the results in table 5 and table 6, Leverage has positive relationship with return on equity. In condition that other factors not change, when leverage increases 1 unit, ROE increase 14.5 units. But when leverage increase 1unit, Tobin’s Q decrease 0.469 units. This results show that debt to total assets ratio effected bank performance, but the corporate governance of firm should control it. If Leverage is high, firm performance will be decrease. Policy suggestion supposed by the researcher in order to improve the effective operations of bank focus on: to improve operating mechanism in Vietnamese bank. Limitations and Suggestion for future research The research is limited to selected participants were women members of the Board of Commissioners or Board of Directors and it study about 33 banks in Viet Nam. The study only acquired the women’s perception regarding their effected to bank performance. The second, This research is limited to women in the boardroom of Vietnamese bank. Nevertheless, the aim of this study, that is to explore women board members’ perceptions of the impact of their presence on firm performance, is well fitted as a means to develop future research. In current research, the researcher was collected data with characteristics of women on board, however some characteristics as age or education were not appropriate. And other control variable as board size was not also appropriate. May be the reason is sample of data is still small and the series time is not enough. The last, data has collected during 2008 to 2012. Time series is 5 years only. It is not enough to detect the effects from women o the board to bank performance for long-term. Interview is very difficult and the researcher had to send a lot of time on process of conducted data. As the target participant busy, there were only few engaged in the study. Not only women on board but also others factors effecting firm performance. The limitations above will be continuing to research and complete.
JEAN MOULIN LYON 3 UNIVERSITY VIETNAM UNIVERSITY OF COMMERCE MASTERS FINANCE AND CONTROL THESIS EFFECTED FROM WOMEN ON THE BOARD TO BANK PERFORMANCE ………………………………………………… Prepared by: AN Thi Xuan Van Supervised by: Professor Laurence Gialdini Hanoi 2013 1 DECLARETION I declare that this current research is my own. The data and the results in this research are honest. The research content has ever not submitted to any degree in any other university or any other research work. Researcher An Thi Xuan Van 2 Acknowledgements I would like to say thank you to all the people who were beside me during the preparation of this paper. Especially, I want to say thank you to Prof. Laurence Gialdini,my Adviser She always assists me in my studies and besides during the time I conducted my thesis, she guided me how to write my thesis and make an excellent power point presentation. She would go the extra mile in reaching out to her advisee and students. To Dr. Abadie, Dr Nguyen Hoang and Dr Vu Manh Chien who guided me and gave me a chance to conduct this current thesis and gave me some ideas for my thesis. To Dr.Duc Khuong Nguyen who gave me advices and ideas during the time I conducted this current research. To Mrs. Bui Viet Thu who has been following our class and give us every information that we need during this Course. To All my dear professors from Jean Mounlin Lyon 3 and Faculty of international training in Viet Nam University of Commerce Who always give me useful counsels which help me to be more confident. Gave me orientation for the way which I should follow and now I have already overcome step one to enter my life with the knowledge that I get in my course. I am sure that it will help me in my future. To all friends who are always with me during the time I study here in Ha Noi. And lastly, I want to say thank you to my family especially to my parents who gave me opportunity to come here to study. They always encourage me and make me become better person. I am very happy and lucky to have a family like that. They follow and research for me; it is my chance in advancement of my life. Thank you for all the persons who are always beside me. 3 Abstract Corporate Governance literature argues that board diver is potentially positive related to firm performance. Current study, the researcher examines with 33 Vietnamese Bank. Objective of the study is to verify the relation between women on the board and bank performance. Quantitative method is applied. The quantitative data was taken from annual reports of the sample banks during period 2008 to 2012 and it was analyzed using SPSS software. The result shows Women on boardroom of Vietnamese banks have positive relationship with bank performance measured by return on equity. Keywords: boardroom, firm performance, agency t he or y , stewardship theory, qu ant it at ive research, qualitative research. 4 TABLE OF CONTENTS Page TITLEPAGE 1 2 DECLARETION 3 ACKNOWLEDGEMENT 4 ABSTRACT 5 TABLE OF CONTENTS 6 LIST OF TABLES LIST OF FIGURE LIST OF AC RONYMS 8 9 10 Chapter 1 INTRODUCTION 11 1.1 Background of the Study 11 1.2 Objective of the Study 12 1.3 Important of the Study 12 2 THEORETICAL PERSPECTIVES, LITERATURE REVIEW AND STUDIES, RESEARCH QUESTIONS AND HYPOTHESES 14 2.1 Introduction 14 2.2 Board and Women in the boardroom 14 2.3 Banking and how is bank work? 16 2.4 Corporate Governance 17 2.5 Firm Performance 19 2.5.1 Financial Performance 20 5 2.6 The link between Woman on the board and firm performance 21 2.6.1 Agency Theory 22 2.6.2 Stewardship theory 23 2.7 Related Studies with the same problems 24 2.8 Corporate Governance in Viet Nam 26 2.8.1 Status of Corporate Governance in Viet Nam 26 2.9 Research questions and Hypothesis 28 2.9.1 Research questions 28 2.9.2 Hypothesis 28 3 RESEARCH METHOD 29 3.1 Introduction 29 3.2 Quantitative research 29 3.3 Qualitative research 30 3.4 Sample and Sampling Technique 30 3.5 Research Instrument and Analyzing methods 31 3.5.1 Research Instrument 31 3.5.2 Analyzing methods 31 3.6 Variables 32 3.6.1 Independent variables 32 3.6.2 Control variables 32 3.6.3 Dependent variables 33 3.7 Empirical Model 35 4 PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA 36 4.1 Descriptive Statistic 36 4.2 Correlation Matrix 38 4.3 Finding Results 38 6 4.3.1 Hypothesis 1 38 4.3.2 Hypothesis 01 40 4.4 Finding relationship between control variable and Vietnamese banks performance 42 4.4.1 Finding relationship between bank size and bank performance 42 4.4.2 Finding relationship between Leverage and bank performance 43 CONCLUSION, LIMITATION AND SUGGESTION FOR FUTURE RESEARCH 45 REFERENCE 47 APPENDIX 50 List of Tables Table Title Page 1 Proportion of Women on the board in Vietnamese Banks 36 2 Variables Descriptive Statistic 36 7 3 Correlation Matrix 38 4 Data analysis of relationship between women on board in Vietnamese banks and bank performance (measure by ROE) 39 5 Data analysis of relationship between women on board in Vietnamese banks and bank performance (measure by Tobin’s Q) 40 8 List of Figures Table Title Page 1 Conceptual framework 28 2 Regression Analysis 31 3 Correlation graph between Women on board and Bank performance (Return on Equity) 40 4 Correlation graph between Women on board and Bank performance (Tobin’s Q) 42 5 Correlation graph between bank size and Bank performance (Return on Equity) 43 6 Correlation graph between Leverage and Bank performance (Return on Equity) 44 9 List of Acronyms BoC : Board of Commissioners BoD : Board of Directors CEO : Chief Executive Officer CFO : Chief Finance Officer CG : Corporate Governance FDIC : Federal Deposit Insurance Corporation IBR : International Business Report ICGN : International Corporate Governance Network KPIs : Key Performance Indicator OECD : Organization for Economic Cooperation and Development ROA : Return on Assets ROE : Return on Equity ROI : Return on Investments ROIC : Return on Invested Capital ROS : Return on Sales TSR : Total Shareholder’s Retur 10 [...]... QUESTIONS AND HYPOTHESES 2.1 Introduction This chapter presents the concepts and theoretical perspectives adopted for the study It includes the definitions of Banking, Board, Women in the boardroom and firm performance, and the descriptions of the theories used to explain the relationships between the two constructs Woman on the board and firm performance Agency theory and stewardship theory are used to. .. in the impact of boards on firm performance, this study focuses on testing hypotheses about effected from Woman on the board to firm performance Further, the study presents results from a qualitative and quantitative study of Vietnamese women board members regarding the role they play in enhancing firm performance The purpose of the study was to throw light on the relationship between woman on the board. .. demands their money (a run on the bank) , there might be problem Even though the Federal Reserve Act requires that banks keep a certain percentage of their money in reserve, if everyone came to withdraw their money at the same time, there wouldn't be enough In the event of a bank failure, your money is protected as long as the bank is insured by the Federal Deposit Insurance Corporation (FDIC) The key to the. .. perspectives on issues brought to the board Management Team As the other tier of the company, the management team is directly responsible for the day -to- day operations (and profitability) of the company * Chief Executive Officer (CEO) – As the top manager, the CEO is typically responsible for the entire operations of the corporation and reports directly to the chairman and board of directors It is the CEO's... the board and management to pursue objectives that are in the interests of the firm and its shareholders and should facilitate effective monitoring Then, based on these principles, the corporate governance framework should ensure the strategic guidance of the firm, the effective monitoring of management by the board, and the board s accountability to the firm and the shareholders Since one of the board s... The study addresses the following research questions: 1 Do women on the board effects firm performance of Vietnamese banks? 2.9.2 Hypothesis: H0: There is a positive relationship between the proportions of Women on the boards (percentage of woman manager) to Firm performance (measured by Return on Equity) H01: There is a positive relationship between proportions of Women in the board (measured by percentage... the CEO's responsibility to implement board decisions and initiatives and to maintain the smooth operation of the firm, with the assistance of senior management Often, the CEO will also be designated as the company's president and therefore also be one of the inside directors on the board (if not the chairman) * Chief Operations Officer (COO) – Responsible for the corporation's operations, the COO looks... individuals chosen from within the company This can be a CEO, CFO, manager or any other person who works for the company on a daily basis The other type of representative is chosen externally and is considered to be independent from the company The role of the board is to monitor the managers of a corporation, acting as an advocate for stockholders In essence, the board of directors tries to 15 make sure... checks we write to pay our bills The thing that's hard to grasp is the fact that while people are putting money into the bank every day, the bank is lending that same money and more to other people every day Banks consistently extend more credit than they have cash That's a little scary; but if you go to the bank and demand your money, you'll get it However, if everyone goes to the bank at the same time... and performance 1.2 Objectives of the study An objective of the study is to examine in the Vietnamese bank, the link between women s participation in top management and its impacts on the financial firm The study only focuses on bank and firm performance The underlying assumption of this research is that the presence of women boards may impact firm performance A diverse workforce has been found to . by: AN Thi Xuan Van Supervised by: Professor Laurence Gialdini Hanoi 2013 1 DECLARETION I declare that this current research is my own. The data and. accurate, relevant and timely information. 2.5 Firm performance Firm performance is a relevant construct in strategic management research and frequently