Can the nomination committee affect banks’ ESG controversies? Empirical evidence from the European systemically important institutions

Banks differ from non-financial institutions because of their high leverage and complexity, due to information asymmetries and a lower quality of risk monitoring, leading to reputational implications. The objective of the analysis is to shed a light on the importance of the Nomination Committee (NC), considering several characteristics of NC members such as: education level, gender, age, curriculum vitae in order to reduce the likelihood of the bank incurring ESG disputes. Moreover, we extend the analysis to other governance features, as the presence of non executive board members on the NC, the percentage of NC members who are significant shareholders (more than 5%) and the number of meetings during the year, i.e. meeting frequency.