Details

Autor(en) / Beteiligte

• Andres, Pablo de
• Vallelado, Eleuterio

Titel

Corporate governance in banking: The role of the board of directors

Ist Teil von

• Journal of banking & finance, 2008-12, Vol.32 (12), p.2570-2580

Ort / Verlag

Amsterdam: Elsevier B.V

Erscheinungsjahr

2008

Quelle

ScienceDirect Pay Per View(PPV) Titles

Beschreibungen/Notizen

• We use a sample of large international commercial banks to test hypotheses on the dual role of boards of directors. We use a suitable econometric model (two step system estimator) to solve the well-known endogeneity problem in corporate governance literature, and demonstrate the empirical and theoretical superiority of system estimator over OLS and within estimators. We find an inverted U-shaped relation between bank performance and board size, and between the proportion of non-executive directors and performance. Our results show that bank board composition and size are related to directors’ ability to monitor and advise management, and that larger and not excessively independent boards might prove more efficient in monitoring and advising functions, and create more value. All of these relations hold after we control for the measure of performance, the weight of the banking industry in each country, bank ownership, and regulatory and institutional differences.