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Archive » June 2018 » The link between board diversity, competence and bank performance

The link between board diversity, competence and bank performance

Rossella Locatelli, Cristiana Schena, Andrea Uselli, Alessandra Tanda
June 2018 - n. 6
Jel codes: G21, G34

This paper investigates the link between the board of directors’ characteristics and bank’s financial performance in a wide sample of Italian banks. The analysis is among the first and few to study jointly directors’ qualitative characteristics and board composition in banks and the effects of these two features of quality and diversity on performance. Results show a significant impact of diversity and financial skills on Roa and Roe, while results on cost efficiency appear less sharp. In terms of policy implications, our results confirm not only the need for supervisors’ attention to corporate governance standards for banks, but also the delivery of guidelines for board of directors’ requirements, both for competence and skills and diversity.

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