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The Effectiveness of Bank Governance Reforms in the Wake of the Financial Crisis: A Stakeholder Approach

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Abstract

This study examines the impact of bank corporate governance reforms in the wake of the financial crisis. These reforms correspond to criticism of shareholder-focused agency-based corporate governance practices and a renewed focus on the stakeholder impact of corporate governance lapses in the financial sector. This study differs from previous studies of corporate governance in the financial sector in using performance indicators that proxy the interests of customers and the community. Drawing on data from 134 countries over an eight-year period from 2004 to 2011, we find that the post-crisis corporate governance reforms in the banking sector appear to be effective in promoting greater bank attention to non-shareholder stakeholders’ interests. This study provides a means to conceptualize measures of bank performance from a stakeholder perspective in order to test emerging ideas about governance effectiveness in the financial sector.

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Authors and Affiliations

  1. School of Business, Providence College, Providence, RI, 02918, USA

    Sylvia Maxfield

  2. Department of Finance, School of Business, Providence College, Providence, RI, 02918, USA

    Liu Wang

  3. Department of International Relations, Centro de Investigación y Docencia Económicas, Mexico City, 01210, Mexico

    Mariana Magaldi de Sousa

Authors
  1. Sylvia Maxfield
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  2. Liu Wang
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  3. Mariana Magaldi de Sousa
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Correspondence to Liu Wang.

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Maxfield, S., Wang, L. & Magaldi de Sousa, M. The Effectiveness of Bank Governance Reforms in the Wake of the Financial Crisis: A Stakeholder Approach. J Bus Ethics 150, 485–503 (2018). https://doi.org/10.1007/s10551-016-3116-8

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