10
NAŠE GOSPODARSTVO / OUR ECONOMY 69 (1) 2023 Milašinović, M., Radojević, A., Jovković, B.
Characteristics of the Board of Directors and Dividend 
Policy: A Case Study of Banks in Western Balkans
Marko Milašinović
a*
, Aleksandra Radojević
b
, Biljana Jovković
b
a
University of Kragujevac, Faculty of Hotel Management and Tourism Vrnjačka Banja, Vojvođanska 5a, 36210 Vrnjačka 
Banja, Serbia
b
University of Kragujevac, Faculty of Economics, Liceja Kneževine Srbije 3, 34000 Kragujevac, Serbia
marko.milasinovic@kg.ac.rs, aleksandra.radojevic96@gmail.com, bjovkovic@kg.ac.rs
                        
ARTICLE INFO
 
Original Scientific Article
Article History:
Received September 2022
Revised February 2023
Accepted February 2023
 
JEL Classification:
G21, G30
 
Keywords:
Banks
Board of directors
Gender structure
Dividend policy
Western Balkans
 
UDK: 336.7:305-055.2
DOI: 10.2478/ngoe-2023-0002
 
Cite this article as: Milašinović, M., 
Radojević, A., & Jovković, B. (2023). 
Characteristics of the Board of Directors 
and Dividend Policy: A Case Study 
of Banks in Western Balkans. Naše 
Gospodarstvo/Our Economy, 69(1), 10-18. 
DOI: 10.2478/ngoe-2023-0002. 
 
©2022 The Authors. Published by 
Sciendo on behalf of University of 
Maribor, Faculty of Economics and 
Business, Slovenia. This is an open access 
article under the CC BY-NC-ND license 
(http://creativecommons.org/licenses/
by-nc-nd/4.0/).
 
Abstract
This paper examines the influence of the size and participation of women 
in the board of directors on the dividend policy of banks in Western Balkans. 
The research covered 104 banks, observing their dividend policy from 2017 
to 2019. The dividend payout ratio was measured by the dividend policy. 
A relatively small number of banks paid dividends during the observation 
period. By applying the Fixed-Effect model, it was determined that the 
size of the board of directors has a statistically significant positive impact 
on the dividend policy of observed banks. Concerning the participation of 
women on the board of directors, a statistically significant impact on the 
dividend policy of banks was not identified. In addition to contributing to the 
existing literature on corporate finances, the research results can be crucial 
to investors when deciding to invest funds in bank stocks.
Introduction
Dividends are the distribution of company profits to shareholders in proportion 
to their ownership (Knežević et al., 2019). The decision on dividend payments 
not only depends on the achieved financial result but can be conditioned by the 
need to protect funds during crises, increased profit volatility, limited external 
financing, or a significant need for capital in the future (Franc-Dąbrowska 
et al., 2020). Dividend payments are regarded as one of the mechanisms 
for monitoring the company's business (Rozeff, 1982) and one of the most 
important financial decisions of the company (Bataineh, 2020). Companies 
should establish an optimal dividend policy that will increase the company's 
value (Roy, 2015) and will interact with financial and investment decisions 
(Mądra-Sawicka & Ulrich, 2020). Dividend policy is of interest to existing 
shareholders, but also of interest to managers, investors and creditors. It is a 
topic that has been confusing researchers for a long time (Yarram & Dollery, 
2015). Therefore, it is the subject of numerous debates in financial literature 
(Zainudin et al., 2018), with theoreticians and researchers trying to develop 
models which describe factors that managers need to consider when making 
decisions on dividend policies (Gill et al., 2010). Most of the research is based 
on the example of companies from the United States and other developed 
countries (Jabbouri, 2016).
* 
Corresponding author

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NAŠE GOSPODARSTVO / OUR ECONOMY 69 (1) 2023 Milašinović, M., Radojević, A., Jovković, B.
Corporate governance plays a significant role in defining 
dividend policies (Atanassov & Mandell, 2018). Namely, in 
addition to adopting strategies, plans, and goals, the board 
of directors decides whether dividends will be paid and in 
what amount (Boshnak, 2021). In a situation where dividend 
payments are not made, the available funds intended for 
dividend payments can be redirected to specific activities 
by the management, achieving personal interests that may 
differ from the interests of the shareholders. In this way, an 
agency problem occurs. By deciding to pay the dividends, 
thereby reducing the available money, the management 
strives to reduce the agency problem (Nazar, 2021). The 
question is why the board of directors would decide to pay 
dividends and/or dividend payments of higher value when 
it is in their "nature" to retain surplus money (Mulchandani 
et al., 2021). Saeed & Sameer (2017) state that one 
of the possible ways is "involving people of different 
characteristics, origin, and experience on the board of 
directors" (p. 1100). The research conducted by Credit Suisse 
in 2012 on a sample of 2,400 global companies found that 
companies with at least one female member on the board 
of directors had better financial performance in comparison 
to companies that did not have a woman on the board of 
directors (Mulchandani et al., 2021). In recent decades, a 
trend of increasing female participation on the board of 
directors was present, which affects better decision-making 
for shareholders (Huang & Kisgen, 2013), or an increased 
amount of dividend payments (García-Meca et al., 2022). 
In other words, characteristics of corporate governance, 
such as the size of the board, the gender structure of 
the board, independence of members, expertise, etc., can 
affect financial decisions, including decisions regarding 
dividend payments (Nazar, 2021). Also, the efficiency of 
such decisions depends on the characteristics of the board 
of directors (Gyapong et al., 2019). As Ain et al. (2021) state, 
the diversity of the board affects the efficiency of work at 
the level of individual members and the level of the entire 
team. However, numerous studies have reached different 
results when it comes to the influence of the size of the 
board of directors and the participation of women in the 
board of directors on the dividend policy of companies, 
which indicates that these relations are more complex and 
can significantly differ between companies (García-Meca 
et al., 2022).
In addition to the fact that recently the number of research 
papers regarding the dividend policy of banks is growing, a 
relatively small number deals with examining the impact 
of the board of directors' characteristics on the same. The 
subject of this paper is dividend policy in banks operating 
in Western Balkans. These banks used to operate in the 
Republic of Serbia, the Republic of Montenegro, the Republic 
of Slovenia, The Republic of Croatia, the Republic of North 
Macedonia, and Bosnia and Herzegovina (the Republic of 
Srpska and the Federation of Bosnia and Herzegovina). 
This paper aims to examine the influence of the size of the 
board of directors and the participation of women in the 
board of directors on the dividend policy of 104 banks in 
the aforementioned countries during the period from 2017 
to 2019. According to the authors' knowledge, it is the first 
survey that examines the influence of the size and gender 
structure of the board of directors on the dividend policies 
of banks in the countries above. Following the subject and 
the aim of the research, the following research questions 
were posed in the paper:
1. Does the board of directors' size affect banks' dividend 
policy in Western Balkans?
2. Does the participation of women on the board of di-
rectors affect the dividend policy of banks in Western 
Balkans?
Data for the research purpose were collected from the 
financial reports of banks. Data analysis includes descriptive 
analysis, correlation analysis, and analysis of the panel data 
series. This paper fills the gap in the literature since there is 
a small amount of research on the influence characteristics 
of the board of directors on dividend policies. The findings 
are essential for investors when deciding to invest their 
funds in bank shares.
After the introductory considerations, the literature review 
shall follow. The research methodology is presented in the 
third part. The results of the research are presented in the 
fourth part. In the fifth part, the concluding considerations 
are presented along with research contributions and 
restrictions, and directions for future research.
Literature Review
A board of directors and their subcommittees can play an 
essential role in providing a supervisory and disciplinary role 
and therefore contributes to reducing the agency problem 
(Yarram & Dollery, 2015). Based on this, the same authors 
state that the dividend policy in companies depends on the 
characteristics of the board of directors in many ways. This 
is also confirmed by a large number of papers designed to 
determine the impact of the characteristics of the board of 
directors on the dividend policy of the company. The following 
is a representation of previous research that examines 
the influence of the size of the board of directors and the 
participation of women in the same on dividend policies.
The size of the board of directors is identified as one of 
the more influential factors in the decision regarding 

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NAŠE GOSPODARSTVO / OUR ECONOMY 69 (1) 2023 Milašinović, M., Radojević, A., Jovković, B.
dividend payments. In the literature, there are two opposing 
views on the impact of this characteristic of the board of 
directors on dividend policy. According to the first point of 
view, larger boards enable managers to specialize, leading 
to more efficient supervision (Klein, 2002). This will result 
in the payment of lower dividends (Mehdi et al., 2017). 
According to another position, a larger board of directors 
experiences inefficient decision-making and difficulty in 
coordination, leading to a demand for higher dividends 
by investors (Jensen & Meckling, 1976). Also, a board of 
directors with multiple members may decide on higher 
dividend payments due to efforts to meet the needs of a 
more significant number of clients (Nazar, 2021). Most of 
the research conducted determined that the size of the 
board of directors has a positive impact on dividend policy 
(Pucheta-Martinez & Bel-Oms, 2016; Chen et al., 2017; 
Elmagrhi et al., 2017; Suwaidan & Khalaf, 2020; Nazar, 
2021; Ain et al., 2021; García-Meca et al., 2022). In other 
words, companies with more members on the board of 
directors pay higher dividends. However, specific research 
indicates that the size of the board of directors does not 
have a statistically significant impact on the company's 
dividend policy (Abdelsalam et al., 2008; Setia-Atmaja et 
al., 2009; Mustafa et al., 2020; Boshnak, 2021). 
Research has shown that greater gender diversity on the 
board of directors leads to more rational decisions and 
minimizes the agency problem as a consequence, which 
can result in larger dividend payments (Mulchandani et 
al., 2021). According to Mustafa et al. (2020), women take 
the necessary actions to resolve agency problems thanks 
to their skills and abilities. Namely, women are recognized 
as good business supervisors and protectors of shareholder 
rights. This is supported by the fact that female members 
of the board of directors are more likely to attend meetings 
and participate in the supervisory board (Adams & Ferreira, 
2009). Also, female members of the board of directors are 
more likely to respect the rules and are more sensitive to 
corporate issues concerning their colleagues (Ain et al., 
2021). However, increased participation of women on the 
board of directors can result in lower dividend payments. 
Namely, if female members of the board of directors are 
recognized as suitable protectors of shareholder rights, 
this can result in a lower demand for dividends (La Porta 
et al., 2000). The fact that women have a higher aversion 
to risk and are more prone to retaining surplus cash (a 
conservative financial attitude) supports this statement 
(García-Meca et al., 2022). As in the case of the size of the 
board of directors, researchers arrived at different results 
regarding the influence of women's participation in the 
board of directors on dividend policies. Therefore Wellalage 
et al. (2012), Pucheta-Martinez & Bel-Oms (2016), Pahi & 
Yadav (2018), Gyapong et al. (2019), Mulchandani et al. 
(2021), Trinh et al. (2021) and Ain et al. (2021) determined 
that the participation of women on the board of directors 
positively affects dividend policies. In other words, along 
with the growth of female participation on the board of 
directors, there is a rise in dividend payments. On the other 
hand, Mustafa et al. (2020) determined that the participation 
of women on the board of directors harms dividend policy, 
while McGuinness et al. (2015) found that this influence is 
not statistically significant. 
When it comes to the influence of the characteristics of 
the board of directors on the dividend policy of banks, two 
research papers are relevant. Al-Amarneh et al. (2017), on a 
sample of 13 commercial banks listed on the Amman Stock 
Exchange in Jordan in the period from 2005 to 2014 have 
determined that the size of the board of directors of the bank 
does not have a statistically significant impact on dividend 
policy (expressed by dividend payout ratios and dividend 
yields). Regarding the participation of women on the board 
of directors, it has been determined that it has a statistically 
significant positive impact on dividend yield values. In 
contrast, the impact on the values of the dividend payout 
ratio is not statistically significant. Observing the banks 
listed on the Indonesia Stock Exchange in the period from 
2009 to 2019, Umar Mai & Syarief (2021) have determined 
that the size of the board has a statistically significant 
positive influence on the propensity for dividend payments, 
while there is a negative statistical impact on the value of 
the dividend payout ratio. The participation of women on 
the board of directors has a statistically significant negative 
impact on the propensity for dividend payments in the 
banks observed in Indonesia. At the same time, the impact 
on the value of dividend payout ratios is also negative but 
not statistically significant.
Research Methodology
This paper includes research on banks that operated in 
the Western Balkans at the end of 2020, examining their 
dividend policy from 2017 to 2019
1
. Therefore, the research 
includes 25
2
 banks from the Republic of Serbia, 20 from 
1
 As dividends in the current year are paid for the previous year, at the time of 
conducting this research, the financial statements of all observed banks were 
not publicly available for 2021, so it was not possible to review their dividend 
policy for 2020.
2
 According to the data of the National Bank of Serbia, at the end of 2020, 26 
banks operated in Serbia, however the Bank of China Serbia A.D. Belgrade was 
excluded from the research (because it is a bank founded on 22.12.2016., and 
officially began operation in 2017, so the data from 2016 was not available).

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NAŠE GOSPODARSTVO / OUR ECONOMY 69 (1) 2023 Milašinović, M., Radojević, A., Jovković, B.
the Republic of Croatia, 13
3
 from Slovenia, 21
4
 from Bosnia 
and Herzegovina, 12 from Montenegro, and 13
5
 banks from 
North Macedonia. The final sample consists of 104 banks, or 
312 observations, which is the corresponding sample size
6
 
according to Tabachnick & Fidell (2007). Banks' individual 
financial statements were used as data sources for this 
research.
Dividend policy was observed in dividend payout ratios 
(DPR). As independent variables, the size of the board of 
directors (SIZE_BOARD) and the participation of women 
on the board of directors of the bank (GENDER) were used. 
In accordance with previous research, as control variables 
specific for banks, profitability (PROF), leverage (LEV), the 
growth rate of the interest income (GR_R), and dividends 
from the previous year (PREV_DIV) were used. Table 1 
shows the method of determining the used variables.
The impact of these determinants on the payment of 
dividends is examined based on a panel regression analysis. It 
is a method used in earlier, similar research (Franc-Dąbrowska 
et al., 2020; Mądra-Sawicka & Ulrich, 2020; Boshnak, 2021; 
Jovković et al., 2021; Mulchandani et al., 2021). In this regard, 
it is possible to formulate the following general model of the 
panel regression analysis in research:
DPRB OARD SIZE GENDER PROF
LEVG RR
it it it it
it
  

 

12 3
45
_
_
iit it
it it
SIZE
PREV DIV




6
7
_
(1)
In addition to the panel above regression analysis, the results 
of descriptive statistics will be presented in the paper and cor -
relation analysis. Statistical data processing was performed 
using IBM SPSS and EViews statistical packages.
3
 According to the data of the Bank of Slovenia, at the end of 2020, 15 banks 
operated in Slovenia, however ABANKA d.d was excluded from the research (due 
to the lack of available financial statements for 2020) and Slovene Export and 
Development (SID) Bank d.d. Ljubljana (because it is a bank that is 100% owned 
by the Republic of Slovenia).
4
 According to the Central Bank of Bosnia and Herzegovina, at the end of 2020 
in Bosnia and Herzegovina (the Federation of Bosnia and Herzegovina and the 
Republic of Srpska), 22 banks were operational, but the Development Bank of the 
Federation of Bosnia and Herzegovina was excluded from the research (because 
it is a bank which is 100% owned by the Federation of Bosnia and Herzegovina, 
whose task is the implementation of the economic policy of the Government of the 
Federation of Bosnia and Herzegovina for economic development and employment).
5
 According to the National Bank of the Republic of North Macedonia, at the end 
of 2020 in the Republic of North Macedonia, 14 banks were operational, but the 
Development Bank of North Macedonia was excluded from the research (because 
it is a bank which is 100% owned by the Republic of North Macedonia, whose task 
is the implementation of the economic development and employment).
6
 Tabachnick & Fidell (2007, p.123), indicate that the minimum number of obser-
vations should be determined according to the formula N>50+8m, with N as the 
minimum number of observations, while m indicates the number of independent 
variables. As 7 variables are used in the research, the minimum number of ob-
servations is 106.
Research Results and Discussion
From the 312 observations, dividend payments were recorded 
in 85 observations. From that number, 22 observations 
were recorded in Slovenia, 18 in Serbia, 17 in Croatia, 16 in 
North Macedonia, 10 in Bosnia and Herzegovina, and two in 
Montenegro. Regarding yearly observations, 38 banks paid 
dividends for 2018, 37 for 2017, and 10 for 2019. Only seven 
banks paid dividends for all three observed years. Table 2 
shows the results of descriptive statistics.
As seen in Table 2, the average amount of earnings paid 
out in the form of dividends is 19.51%. Banks' boards of 
directors have about 4 members on average, which varies 
from 2 to 8. On average, almost a quarter of the board 
of directors members are women, whereas it is recorded 
that in some banks, all members of the board are female 
in gender. On the other hand, it was also recorded that 
the board of directors of individual banks consists only of 
persons of the male gender. The average profitability of 
banks observed during the period was 0.73%, while the 
average share of liabilities in total assets was 85.87%. 
The average growth rate of interest income amounted 
to 2.85%.
The results of Pearson's correlational analysis are given 
in Table 3. The existence of a statistically significant 
positive dependency between the dividend payout ratio 
and the size of the board of directors was determined, 
whereas this dependency is small (r=0.136; p=0.016). Also, 
a positive dependency is present between the dividend 
payment ratio and the participation of women on the 
board of directors, but it is not statistically significant. 
A statistically significant positive dependence has been 
identified between the dividend payments and the fact 
that banks paid dividends in the previous year, whereas 
this dependency is of medium intensity (r=0.468, p=0.000). 
Also, a statistically significant positive dependency 
of medium intensity has been recorded between the 
dividend payout ratio and the size of the bank (r=0.376; 
p=0.000). A positive statistically significant dependency 
was identified between the dividend payout ratio and 
profitability of banks, with a dependence of small intensity 
(r=0.166; p=0.003). Also, the existence of (positive or 
negative) statistically significant dependencies between 
independent variables can be noticed in Table 3, with a 
small intensity of dependence. Based on this, the presence 
of multicollinearity shouldn’t be expected.
Table 4 shows the results of the Hausman test. This test 
shows that the Fixed-Effects model is more adequate in 
analyzing the collected data than the Random-Effects 
model. The results of the Fixed-Effects regression analysis 

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NAŠE GOSPODARSTVO / OUR ECONOMY 69 (1) 2023 Milašinović, M., Radojević, A., Jovković, B.
Table 1
Research variables
Variable Symbol Description
Dependent Variable
Dividend payout ratio DPR Cash dividend/Net profit
Independent Variables
Control Variables BOARD_SIZE Total number of board members
Percentage of female directors on 
the board
GENDER The percentage of female directors on the board to board size
Control Variables
Profitability PROF Net profit/ Total assets
Leverage LEV Total liability/Total assets
Growth rate GR_R
(Current interest income-Last year interest income)/Last year interest 
income
Bank size SIZE Natural logarithm of total asset 
Previous year’s dividends PREV_DIV Dummy variable coded as 1 for banks which declared and paid
Source: Authors’ research
Table 2
Descriptive statistics
Variables Mean Median Standard deviation Minimum Maximum
DPR 0.1951 0 0.452 0 2.9578
BOARD_SIZE 4.22 4 1.585 2 8
GENDER 0.2442 0.2501 0.2133 0 1
PROF 0.0073 0.0077 0.0184 -0.0806 0.1205
LEV 0.8587 0.8702 0.0625 0.5901 0.9873
GR_R 0.0285 -0.0058 0.894 -0.7438 15.3571
SIZE 13.2318 13.1114 1.33631 10.026 16.9839
PREV_DIV 0.343 0 0.475 0 1
Source: Authors’ research
Table 3
Correlation matrix
DPR BOARD_SIZE GENDER PROF LEV GR_R SIZE PREV_DIV
DPR 1
BOARD_SIZE 0.136* 1
GENDER 0.013 -0.069 1
PROF 0.166** 0.072 -0.063 1
LEV -0.019 -0.394** -0.073 0.046 1
GR_R -0.062 0.080 0.033 -0.216** -0.277 1
SIZE 0.376** 0.264** -0.052 0.282** 0.008 -0.181** 1
PREV_DIV 0.468** 0.034 0.078 0.266** 0.108 -0.070 0.244** 1
Source: Authors' research
Note: * and ** indicate significance at the 0.05 and 0.01 levels, respectively

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NAŠE GOSPODARSTVO / OUR ECONOMY 69 (1) 2023 Milašinović, M., Radojević, A., Jovković, B.
are presented in Table 5. Based on the value of the 
corrected determination coefficient, it can be concluded 
that the observed independent variables are capable of 
explaining variations in the value of the dividend payout 
ratio, in the amount of 24.89%. According to Field (2013), 
there is no autocorrelation problem, since the value of the 
Durbin-Watson test (2.6381) is in an interval from 1 to 3.
Table 4
Hausman test
Test summary Chi. Sq. Stat p-value
 12.1466 0.0158
Source: Authors' research
As seen in Table 5, the size of the board of directors has 
a statistically significant positive impact on the dividend 
policy of observed banks and this provides us with an 
answer to the first research question. This indicates a 
greater likelihood of bank dividend payments if they 
have more members on the board of directors. Ntim et 
al. (2015) explain this by the fact that a larger board of 
directors, thanks to greater knowledge and experience, 
is more successful in monitoring and controlling the 
opportunistic behavior of managers, which affects the 
reduction of the agency problem and improves business 
results, i.e., dividend payments. Dividend payout 
positively affects board composition, suggesting that 
firms with high-payout tend to adopt good corporate 
governance structures to protect shareholder interest 
(Nazar, 2021, p. 291). This may affect the awareness of 
shareholders to hold stocks. In this way, banks can protect 
themselves from takeovers. When it comes to research 
conducted on the example of banks, Umar Mai & Syarief 
(2021) determined that the size of the board positively 
affects the propensity to pay dividends while negatively 
affecting the value of dividend payout ratios.
It was determined that the participation of women on 
the board of directors negatively affects the dividend 
policy of banks, whereas this impact is not statistically 
significant (Table 5). Umar Mai & Syarief (2021) came 
to similar conclusions. Namely, they found that the 
participation of women on the board of directors has 
a negative statistically significant impact on dividend 
payment tendencies. At the same time, the impact on 
the value of dividend payout ratios is also negative 
but not statistically significant. On the other hand, Al-
Amarnech et al. (2017) found that the participation of 
women on the board of directors positively affects the 
dividend policy of banks expressed by the dividend yield, 
while there is no statistically significant impact on the 
dividend payout ratio. As an explanation for the negative, 
but not statistically significant, participation of women 
on the board of directors regarding the dividend policy 
of observed banks, we can state that these banks mainly 
operate in developing markets. Due to the uncertainty of 
doing business in these markets, the female members 
of the board of directors will influence the reaching of 
conservative financial decisions and the payment of 
lower dividends (Saeed & Sameer, 2017). This is in line 
with the theory of gender socialization, according to 
which women are considered more conservative than 
men when making financial decisions (García-Meca et al., 
2022). The difference in the results about the influence 
of women members of the board of directors on the 
dividend policy can also be explained by the fact that 
earlier research did not examine how many of them voted 
for the payment of dividends. For these reasons, a survey 
on this topic should be conducted in future research. 
This would result in more precise information about the 
influence of women members of the board of directors on 
the dividend policy.
Table 5
Fixed-effects regression analysis results
Variables Coefficient t-value Sig.
Intercept -0.9170 -0.4739 0.6361
BOARD_SIZE 0.1244 2.4139 0.0167
GENDER -0.2495 -0.7592 0.4486
PROF -0.7239 -0.3125 0.7549
LEV -1.1991 -0.9590 0.3387
GR_R -0.0190 -0.5658 0.5721
SIZE 0.1250 0.7962 0.4269
PREV_DIV 0.1223 0.9735 0.3315
Adjusted R square=0.2489; F=1.9371; (p(F statistic)=0.000); 
Durbin-Watson stat.=2.6381
Source: Authors' research
Conclusion
Dividend policy represents a crucial topic in the field of 
corporate finance. Much research has been conducted 
to determine the influence of corporate governance 
characteristics on the dividend policy of companies 
operating in different markets and industries, whereby 
researchers arrived at various results. However, in a small 
portion of the research, the impact of the characteristics 
of corporate governance on the dividend policy of banks 
and other financial institutions was examined. This paper 

16
NAŠE GOSPODARSTVO / OUR ECONOMY 69 (1) 2023 Milašinović, M., Radojević, A., Jovković, B.
aims to examine the influence of the size of the board 
of directors and participation of women in the board of 
directors on the dividend policy of banks which operate 
in the Western Balkans, whereas dividend payment ratios 
express dividend policies. By applying the regression 
Fixed-Effect model, research was conducted on a sample 
of 104 banks, whereas their dividend policy was observed 
in the period from 2017 to 2019.
The research found that most banks during the 
observed period did not pay dividends, whereas this 
number decreased during the observed period. The 
most significant number of dividend payments was 
recorded in banks operating in Slovenia, while the least 
was recorded in the Republic of Montenegro banks. Less 
than 7% of the observed banks have made dividend 
payments during all three years of observation. It was 
determined that the size of the board of directors of 
the bank positively affects its dividend policy, i.e., banks 
with a more significant number of members on the 
board of directors pay dividends to a greater extent. 
On the other hand, the existence of a statistically 
significant influence of the participation of women on 
the board of directors regarding dividend policies of 
observed banks was not identified. Also, the impact of 
control variables (profitability, leverage, the growth rate 
of interest income, bank size, and dividends from the 
previous year) on the dividend policy of banks is not 
statistically significant.
Research offers several theoretical contributions to the 
existing literature. Firstly, it is complementary to the 
existing research that aimed to identify factors of the 
dividend policies of banks. Secondly, it takes into account 
the impact of the board of directors' characteristics on 
the banks' dividend policy, and according to the author, 
this is the first research conducted on a sample of 
banks in Western Balkans. In addition, the results of this 
research can be significant, above all, for investors when 
deciding to invest their funds in bank shares. Namely, 
they should consider the size of the board of directors 
when deciding to purchase shares and therefore achieve 
a higher yield on the basis of dividends. 
Several restrictions appear in this paper which provides 
directions for future research. Since this research only 
examined the influence of the size and gender structure 
of the board of directors on the bank's dividend 
policy, other characteristics of the board of directors 
should also be included in the future research, such 
as work experience, education, number of meetings, 
independence of members of the board etc. Also, in 
future research, the influence of the ownership structure 
and the audit committee on the dividend policy of 
banks should be considered. Since the research covered 
the dividend policy of banks from 2017 to 2019, the 
influence of COVID-19 should be examined in future 
research. Additionally, the impact of the board of 
directors' characteristics on the dividend policy of other 
financial institutions, such as insurance companies and 
leasing companies operating in observed countries, 
should also be examined.
References
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Značilnosti upravnega odbora in politika dividend: študija primera 
bank na Zahodnem Balkanu
Izvleček
Ta članek proučuje vpliv velikosti in udeležbe žensk v upravnem odboru na dividendno politiko bank na Zahodnem Balkanu. 
Raziskava zajema 104 banke, pri čemer opazuje njihovo dividendno politiko v obdobju od leta 2017 do leta 2019. Dividendna 
politika je merjena s količnikom izplačila dividend. V opazovanem obdobju je dividende izplačevalo razmeroma majhno 
število bank. Z uporabo modela s fiksnim učinkom je bilo ugotovljeno, da ima velikost upravnega odbora statistično značilen 
pozitiven vpliv na dividendno politiko opazovanih bank. V zvezi z udeležbo žensk v upravnem odboru ni bil ugotovljen 
statistično značilen vpliv na dividendno politiko bank. Rezultati raziskave so lahko, razen tega, da prispevajo k obstoječi 
literaturi s področja korporativnih financ, pomembni tudi za investitorje, ko se odločajo o vlaganju sredstev v delnice bank. 
Ključne besede: banke, upravni odbor, struktura po spolu, dividendna politika, Zahodni Balkan