Corporate governance, diversity, and ethics in the banking sector
Abstract
This paper examines the relationship between the characteristics associated with a better supervision of the corporate governance of financial institutions, and its effects on both their economic performance and their ethical reputation. More specifically, it focuses on the impact of social responsibility (SR) policies with a focus on diversity on the economic performance in the banking sector. It further shows the existing evidence on the relationship between “good governance” and the ethical responsibility of financial institutions. Most empirical studies indicate a positive relationship between those variables linked to more effective governance, mainly related to board characteristics (size, independence, experience, and diversity), and the ethical reputation of financial institutions. However, the relationship between governance characteristics and economic performance is not conclusive in the literature. The relevance of this analysis lies in shedding light on the unconclusive academic debate on social responsibility and its contribution to corporate value. This discussion is of particular interest in the banking sector given that the empirical evidence is significantly lower than in other industries, and because it would allow to test the effects of the new regulation that emerged as a consequence of the 2008 financial crisis.
Recived: 06 July 2022
Accepted: 08 July 2022
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