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Bank Misconduct, Board Diversity and CEO Turnover

Casu, B. ORCID: 0000-0003-3586-328X, Gallo, A., Kalotychou, E. & Sarkisyan, A. (2023). Bank Misconduct, Board Diversity and CEO Turnover. Review of Corporate Finance, 3(1–2), pp. 149-174. doi: 10.1561/114.00000038


This paper investigates corporate reactions to bank misconduct episodes. We test whether more diverse boards have a stronger disciplining effect and trigger “changes at the top”. We consider misconduct fines issued by US regulators to EU listed banks during the period 2009–2018. We find that CEO dismissals are more likely following regulatory fines, but not during the investigation process. Board gender diversity does not seem to impact on boards’ decision to fire the CEO, nor reinforce boards' disciplining effect in the presence of misconduct. The presence of foreign directors and age diversity increase the likelihood of CEO dismissal following regulatory sanctions.

Publication Type: Article
Additional Information: The final publication is available from now publishers via
Publisher Keywords: Misconduct, gender diversity, CEO turnover, Board of Directors, bank
Subjects: H Social Sciences > HF Commerce
H Social Sciences > HG Finance
H Social Sciences > HN Social history and conditions. Social problems. Social reform
Departments: Bayes Business School
Bayes Business School > Finance
SWORD Depositor:
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