Book contents
- The Cambridge Handbook of EU Sustainable Finance
- The Cambridge Handbook of EU Sustainable Finance
- Copyright page
- Contents
- Figures
- Tables
- Contributors
- Preface
- Acknowledgements
- Part I Introduction
- Part II Ethics and Sustainability in Corporate Law, Corporate Governance and Conduct
- 3 Firm Value versus Social Value
- 4 The Hardening of Corporate ESG
- 5 Stakeholder Engagement
- 6 Bank Governance and Sustainability
- 7 Risk Culture and Sustainability
- 8 Conduct Risk as a Possible Approach for Enhancing Awareness and Management of ESG-Related Risks
- 9 Sustainability and Executive Compensation
- Part III Integrating Sustainability in Financial Markets Regulation
- Part IV Ensuring Financial Stability and Sustainability
- Part V Financial Innovation and Sustainability
- Index
- References
6 - Bank Governance and Sustainability
from Part II - Ethics and Sustainability in Corporate Law, Corporate Governance and Conduct
Published online by Cambridge University Press: 30 January 2025
Book contents
- The Cambridge Handbook of EU Sustainable Finance
- The Cambridge Handbook of EU Sustainable Finance
- Copyright page
- Contents
- Figures
- Tables
- Contributors
- Preface
- Acknowledgements
- Part I Introduction
- Part II Ethics and Sustainability in Corporate Law, Corporate Governance and Conduct
- 3 Firm Value versus Social Value
- 4 The Hardening of Corporate ESG
- 5 Stakeholder Engagement
- 6 Bank Governance and Sustainability
- 7 Risk Culture and Sustainability
- 8 Conduct Risk as a Possible Approach for Enhancing Awareness and Management of ESG-Related Risks
- 9 Sustainability and Executive Compensation
- Part III Integrating Sustainability in Financial Markets Regulation
- Part IV Ensuring Financial Stability and Sustainability
- Part V Financial Innovation and Sustainability
- Index
- References
Summary
This chapter discusses the importance of decision-making and agency problems in bank governance with particular focus on the role of the board of directors in addressing sustainability risks that are increasingly affecting the banking business. It considers traditional agency theories that underpin corporate governance and suggests that they do not offer a full explanation of the ‘collective’ agency problems that exist in large complex organisations, such as banks and other financial institutions. Human agency theory offers an alternative theory that emphasises the importance of organisational culture in determining standards, norms and values that influence agent behaviour. As to bank boards, the chapter stresses that although their role is primary, regulatory intervention may be necessary to ensure that organisational practices are adequately managing agency problems regarding sustainability concerns. The chapter concludes with some recommendations for how bank governance and business practices could be improved to support society’s sustainability objectives.
Keywords
- Type
- Chapter
- Information
- The Cambridge Handbook of EU Sustainable FinanceRegulation, Supervision and Governance, pp. 134 - 153Publisher: Cambridge University PressPrint publication year: 2025
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