Art-based initiatives and corporate governance of financial institutions: European evidence following the revised OECD corporate governance framework

Abstract

Financial institutions and the arts have been a historical and natural duo since the Middle Ages, when bankers supported the arts sector and artists. This paper investigates the corporate governance (CG) characteristics of today’s financial institutions that engage more extensively with art-based initiatives (ABI). Using a sample composed of the 42 largest European listed financial institutions and manually collected ABI information, the results indicate that, overall, companies with higher levels of CG quality or higher proportions of female directors and entities with greater ownership dispersion, engage more extensively with ABI. This evidence shows that firms with well-implemented CG structures and especially those with a significant presence of women on the board, are more likely to support initiatives aimed at developing and/or preserving cultural heritage. The findings have implications for the arts sector because they provide arts institutions with a better understanding of the companies and people within them that could be their best interlocutors when developing long-term partnerships. They may also encourage “arts-sensitive” investors to target their investment decisions towards institutions with some specific CG attributes.