A growing body of research suggests that the composition of a firm’s board of directors can influence its environmental, social and governance (ESG) performance. In the banking industry, ESG performance has not yet been explored to discover how a critical mass of women on the board of directors affects performance. This paper seeks to fill this gap in the literature by testing the impact of a critical mass of female directors on ESG performance. Other board characteristics are accounted for: independence, size, frequency of meetings and Corporate Social Responsibility (CSR) sustainability committee. We use fixed effects panel regression models on a sample of 108 listed banks in Europe and the United States for the period 2011–2016. Our main empirical evidence shows that the relationship between women on the board of directors and a bank’s ESG performance is an inverted U-shape. Therefore, the critical mass theory for banks is not supported, confirming that only gender-balanced boards positively impact a bank’s performance for sustainability. There is a positive link between ESG performance and board size or the presence of a CSR sustainability committee, while it is negative with the share of independent directors. With this work, we stress the key role of corporate governance principles in banks’ ESG performance, with relevant implications for both banks and supervisory authorities.

The relationships between sustainable behavior, firm reputation, and economic performance are significant issues that continue to become more important. Corporate reputation has important implications for economic performance while corporate social responsibility engagement is considered a key determinant of reputation. The aim of this study is to empirically test such relationships regarding the banking sector and for the sub-prime crisis period (2008)(2009)(2010)(2011)(2012). We apply our hypothesis to 75 large international banks using Reputation Institute and ASSET4 data and adopting a multiple econometric approach. Our initial results are encouraging and consistent with the existing literature: bank reputation is positively related to accounting performance and is negatively related to leverage and riskiness profiles. However, while a positive relationship between reputation and social performance exists, relationships between reputation, corporate governance, and environmental performance are always negative. We discuss these results by identifying related causes and by presenting avenues for future research.

This study aims to explore the impact of corporate social performance (CSP) on firm risk, and it proposes the moderating role of corporate governance (CG) among this relationship. Although the literature on corporate social responsibility is extensive, there is still a lack of knowledge about how CSP influences firm risks, as well as the role of CG in this relationship. To fill this gap, we have empirically tested the impact of CSP on a firm's risk through a longitudinal analysis on S&P 500 firms from 2015 to 2019. Results show a significant negative relationship between CSP and firm risks, which is positively moderated by CG mechanisms. Our study contributes to the empirical research on corporate social responsibility and it provides insights for managerial decisions to encourage managers to pursue environmental and social practices that reduce the firm risk, with positive impacts on the firm value.

Purpose – The purpose of this paper is twofold. First, it aims to measure and compare the efficiency change of French, German, Italian, Spanish and UK banking groups in a context of financial crisis, over the period 2006-2010; second, it attempts to analyse the internal and environmental determinants of banking groups efficiency. Design/methodology/approach – In this paper the efficiency is estimated by a two-stage semi-parametric procedure. In the first stage, we build a common production frontier across countries using the data envelopment analysis (DEA) (Debreu, 1951; Farrell, 1957). To further analyse the efficiency changes over years we use the Malmquist total factor productivity index, based on DEA technique. In the second stage, in order to determine the factors that impact on bank efficiency, the authors perform a bootstrapped truncated regression model with discretionary inputs as independent variables, following Simar and Wilson (2007). Findings – The empirical results show that overall the “large” banking groups are more efficient than the “small” ones. However the Malmquist total factor productivity analysis highlights that during the crisis, in particular between 2007 and 2009, unless Britain, in all countries the small banks show a better cost performance than the larger ones. In general, the authors find a moderate efficiency convergence between countries and between large and small banking groups. As regards the determinants of banking groups efficiency, we find that more liquid, less capitalized banking groups and those more oriented towards the traditional activity of lending are more efficient. Practical implications – The authors find a positive and high statistically significant relationship between both long- and short-term liquidity degree and the cost efficiency of the banking groups. The policy implication of this result is very significative also in the light of the new banking regulation introduced by Basel III that imposes new rules to strengthen the liquidity risk management. Social implications – The authors find that the macroeconomic environment variables have some impact on efficiency: the higher the debt and the GDP per capita of the country the lower the bank’s efficiency. Originality/value – Unlike the most literature on this topic, that usually considers individual banks even if they belong to the same financial conglomerate, the authors analyse only banking groups. In particular, the authors consider all banking groups belonging to the most industrialized European countries in a context of financial crisis and cross-border aggregation movements. Furhermore the authors compare cross-country cost performance of small and large groups, considering the loan loss provisions as an additional input in order to correct the efficiency score for credit risk.

This paper analyses whether banks with a greater commitment to climate change issues, proxied by the climate change score from the Carbon Disclosure Project (CDP), experience an impact on their credit risk and whether this relationship is moderated by the environmental performance of the country where the bank is located. For these purposes, a panel data analysis is carried out on a large sample of international listed banks over the period 2011–2019. Our findings suggest that the commitment to climate issues lowers the risk level of bank loans when banks have a medium‐high level of attention to these issues. The country location of the bank does play a key role: In countries with better environmental performance, credit risk reduction takes place at lower levels of climate change commitment. This study provides important implications for the actions that bank managers, regulators and practitioners can enact.