Board demographics and performance: evidence from European Union banks

This article examines the influence of board members demographics on banks performance. Specifically, building on the upper echelons theory we investigate how board members age, MBA, industry experience and diversity (gender and nationality) affect banks performance. By analysing a sample of 83 significant banks from the European Union, we find that banks performance significantly and positively relates to board members MBA and industry experience, but negatively to board members age and nationality diversity. This provides support to the argument that these directors’ personal characteristics are crucial for banks board effectiveness, and are key-factors in explaining differences in banks performance. Our study results contribute to the existing literature on the relationship between board characteristics and banks performance, by improving knowledge about the potential governance factors that affect banks performance and identifying which aspects of board demographics are associated with higher performance.