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Board Diversity Reforms: Do they Matter for EU Bank Performance?

Casu, B. ORCID: 0000-0003-3586-328X (2019). Board Diversity Reforms: Do they Matter for EU Bank Performance?. European Financial Management,

Abstract

We examine the impact of governance reforms related to board diversity on the performance of EU banks. Using a difference-in-difference approach, we document that reforms increase bank stock returns and their volatility within the first three years after their enactment. The type of reform matters, with quotas increasing return volatility more compared to affirmative actions. The effectiveness of reforms depends on a country's institutional environment. The impact on volatility is lower in countries more open to diversity, with common law system and with higher economic freedom. Finally, reforms play a bigger role in banks that have ex-ante less heterogeneous boards.

Publication Type: Article
Additional Information: This is the peer reviewed version of the following article: Casu, B. (2019). Board Diversity Reforms: Do they Matter for EU Bank Performance?. European Financial Management, which is to be published in final form at http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1468-036X. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions.
Publisher Keywords: Board diversity reforms, corporate governance codes, bank performance
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
H Social Sciences > HG Finance
H Social Sciences > HN Social history and conditions. Social problems. Social reform
J Political Science > JN Political institutions (Europe)
Departments: Cass Business School > Finance
URI: http://openaccess.city.ac.uk/id/eprint/22322
[img] Text - Accepted Version
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