Corporate Governance Impact on Bank Performance: Evidence from Europe

Corporate Ownership & Control, Forthcoming

31 Pages Posted: 13 Jul 2016

See all articles by salma belhaj

salma belhaj

University of Greenwich - Business School

Cesario Mateus

Aalborg University Business School

Date Written: July 13, 2016

Abstract

This paper investigates the impact of corporate governance on European bank performance during the period 2002-2011. Using a sample of 73 banks from 11 European countries, we examine the relationship between corporate governance measures more specifically the board size and composition, the gender diversity and the CEO duality on the European bank performance. During the period 2002-2011, our results show that the board size and the gender diversity have a positive and significant impact on bank performance. Large board of directors with more female members led to better bank performance, whereas, the board composition and the CEO duality have no significant effect in explaining the bank performance for the European countries. During the global financial crisis, our findings show that the board size and the board composition are negatively and significantly correlated to the bank performance. Smaller boards of directors with less number of independent (non-executive) directors have outperformed the ones with larger boards and more independent directors during the crisis. However, the gender diversity and the CEO duality have no significant impact on the European bank performance.

Keywords: Corporate governance, Bank performance, European countries, Board Size, board composition, Gender diversity, CEO duality.

JEL Classification: G01; G21; G34

Suggested Citation

belhaj, salma and Mateus, Cesario, Corporate Governance Impact on Bank Performance: Evidence from Europe (July 13, 2016). Corporate Ownership & Control, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2809063

Salma Belhaj

University of Greenwich - Business School ( email )

United Kingdom

Cesario Mateus (Contact Author)

Aalborg University Business School ( email )

Aalborg
Denmark

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