The impact of governance structures on the financial performance of Brazilian financial cooperatives

Resumen

Financial cooperatives play an important role in promoting financial inclusion and community development. This study investigates how board characteristics, including size, gender diversity, and tenure, influence the financial performance of 930 Brazilian financial cooperatives between 2008 and 2022. Using panel data and the System Generalized Method of Moments (SYS-GMM), the results reveal that larger boards negatively affect performance due to coordination inefficiencies, while longer tenure on supervisory boards enhances stability and oversight. Female representation on the board of directors shows a significant negative association with financial performance, reflecting potential cultural and institutional challenges in governance. Cooperative size positively affects performance, reflecting economies of scale, while leverage and network affiliations pose financial challenges. The findings highlight the importance of designing governance structures that balance inclusivity, representation, and financial sustainability, providing insights for improving governance in cooperatives operating in emerging markets.