Analysis of the Effect of Board Diversity on Banking Firm Performance in Indonesia

Setiohandiko, Andre Christian and Murhadi, Werner Ria Analysis of the Effect of Board Diversity on Banking Firm Performance in Indonesia. Jurnal Media Ekonomi. ISSN 2656-8861 (In Press)

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Abstract

Abstract Purpose: This study aims to analyze the effect of board of directors' diversity — across three dimensions (gender, age, and nationality) — on the performance of Indonesian banking firms, measured through four performance proxies (ROA, Tobin's Q, CAR, and NPL). Research Methodology: Panel data from 44 banks listed on the Indonesia Stock Exchange (IDX) for the 2020–2024 period (220 firm-year observations) were analyzed using panel data regression, with model selection conducted through the Chow test and the Hausman test; all data processing was performed using EViews. Results: Nationality diversity has a significant positive effect on ROA and CAR; age diversity (the proportion of directors aged below 54 years) has a positive effect on Tobin's Q and CAR but a negative effect on ROA; gender diversity does not show a significant effect on any of the performance proxies; and the model for NPL is not simultaneously significant, so the results related to credit risk cannot be conclusively determined. Conclusions: Nationality diversity is the most strategic dimension for enhancing bank performance, whereas the benefits of gender diversity have not yet been optimally realized due to its still-low representation on Indonesian bank boards. Limitations: This study does not include control variables such as bank size, bank age, past profitability, or the COVID-19 pandemic period, which caused the NPL model to be simultaneously insignificant. Contributions: This study extends Resource Dependence Theory to a developing-country banking context and offers practical implications for bank management in structuring board composition, for regulators (OJK) in formulating governance policy, and for investors in assessing the prospects of banking issuers. Keywords: age diversity; banking performance; gender diversity; indonesia; nationality diversity How to Cite: Setiohandiko, A. C., & Murhadi, W. R. (2026). Analysis of the effect of board diversity on banking firm performance in Indonesia. Jurnal Media Ekonomi, 31(2), xx-xx

Item Type:	Article
Subjects:	H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Divisions:	Faculty of Business and Economic > Department of Management
Depositing User:	BAMBANG SEPTIAWAN
Date Deposited:	08 Jul 2026 04:32
Last Modified:	08 Jul 2026 04:32
URI:	http://repository.ubaya.ac.id/id/eprint/50922

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