Can ethical behavior reduce credit risk? Focus on the moderator role of the board of directors

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Abstact

The purpose of the study is to investigate whether companies that act ethically benefit in terms of reducing credit risk and if the board of directors (BoD) characteristics play a moderator role in the relationship between the presence of the legality rating and the credit risk. The study sample consists of 285 Italian companies between 2012 and 2022. The information related to the legality rating (LR) was taken from the Authority Guarantor of Competition and the Market (AGCM) and the other information associated with the companies was from the AIDA database by Bureau Van Dijk. The results of the study show a positive and statistically significant relationship between the LR and the EM-Score and a positive association between women on the BoD and the EM-Score. Moreover, the research reveals that the presence of women on the BoD amplifies the relationship between LR and credit risk.

Keywords: Legality Rating, Credit Risk, Corporate Governance, Ethical Behavior

JEL Classification: G34

Received: 14.05.2024
Accepted: 22.05.2024

How to cite: Cantone, C., & Spignese, A. (2024). Can ethical behavior reduce credit risk? Focus on the moderator role of the board of directors. In Ž. Stankevičiūtė, A. Kostyuk, M. Venuti, & P. Ulrich (Eds.), Corporate governance: Research and advanced practices (pp. 39–43). Virtus Interpress. https://doi.org/10.22495/cgrapp6