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

Posted: 29 Oct 2018

See all articles by Francesca Arnaboldi

Francesca Arnaboldi

University of Milan

Barbara Casu

City University London - Sir John Cass Business School

Elena Kalotychou

Cass Business School, City, University of London

Anna Sarkisyan

University of Essex - Essex Business School

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Date Written: August 31, 2018

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 up to two years after their introduction. We find that the impact is similar across mandatory and affirmative actions, albeit the former increase bank risk. The performance-diversity relationship varies with the type of reform. While gender diversity per se seems to have no significant influence, when women’s presence is mandatory it reduces risk. The effectiveness of reforms depends on a country's institutional environment, its legal origin and its cultural openness to diversity.

Keywords: Board Diversity Reforms, Corporate Governance Codes, Bank Performance

Suggested Citation

Arnaboldi, Francesca and Casu, Barbara and Kalotychou, Elena and Sarkisyan, Anna, Board Diversity Reforms: Do They Matter for EU Bank Performance? (August 31, 2018). Available at SSRN: https://ssrn.com/abstract=3261156

Francesca Arnaboldi (Contact Author)

University of Milan ( email )

Via Festa del Perdono 7
Milan, 20122
Italy

Barbara Casu

City University London - Sir John Cass Business School ( email )

106 Bunhill Row
London, EC1Y 8TZ
United Kingdom

Elena Kalotychou

Cass Business School, City, University of London ( email )

106 Bunhill Row
London, EC1Y 8TZ
Great Britain

Anna Sarkisyan

University of Essex - Essex Business School ( email )

Wivenhoe Park
Colchester, CO4 3SQ
United Kingdom

HOME PAGE: http://www.essex.ac.uk/ebs/staff/profile.aspx?ID=2004

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