Board Determinants in Banking Industry. An International Perspective

Andrés, Pablo; Romero‐Merino, M. Elena; Santamaría, Marcos; González, Eleuterio Vallelado

doi:10.1002/mde.2541

Cited by 22 publications

(13 citation statements)

References 63 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Country‐level variables might amplify this difference. Using an international sample of commercial banks over the period 1996–2006, de Andres, Romero‐Merino, Santamaría, and Vallelado () show that more complex banks that also have low ownership concentration and are headquartered in a civil law country have more independent (and larger) boards . However, Adams and Mehran () argue that the status of outside directors in banks might be overstated because of the lending relationships with directors or directors’ employers that are not individually disclosed.…”

Section: Governance Mechanismsmentioning

confidence: 99%

See 1 more Smart Citation

Corporate Governance in Banks

John¹,

Masi²,

Paci³

2016

Corporate Governance

125

112

View full text Add to dashboard Cite

Manuscript Type: ReviewResearch Question/Issue: We survey the literature on corporate governance in banks in the US and international settings. We discuss how the specialness of banks, deposit insurance, high bank leverage, and bank regulation interact with bank governance. We evaluate bank governance from three perspectives: (1) maximizing bank equity value, (2) maximizing total enterprise value, and (3) maximizing social objectives. Our survey includes evidence on how bank governance differs from that of manufacturing firms. We also survey studies on managerial incentives in banks and their implications for bank performance and risk taking before and during the 2007-2008 financial crisis.Research Findings/Insights: The high leverage (usually above 90 percent) of banking institutions gives rise to a trade-off between strengthening equity governance and maximizing enterprise value. Aligning managers very closely with shareholders can give rise to strong incentives for risk shifting to the detriment of firm value. The bank risk choices might also go against the societal objectives of a stable financial system. Theoretical/Academic Implications: We provide a framework for the optimal design of bank governance and bank regulation, considering the objectives of both depositors and society-at-large in addition to those of bank shareholders. This framework could be especially important in determining risk choices by banks and the effects of such on the stability of the financial system. Practitioner/Policy Implications: Our analysis of the literature surveyed has policy implications for bank regulation, top-management compensation in banks, and directives for design of governance in banks. We discuss implications for direct regulation of banks and regulation of bank governance. The findings surveyed provide guidance for board independence, board size, board composition, and incentive features in top-management compensation.

show abstract

Section: Governance Mechanismsmentioning

confidence: 99%

“…De Andres et al () include banks from Canada, the United Kingdom, the United States (common law countries), and France, Italy, the Netherlands, and Spain (civil law countries). All of the banks in the sample have one‐tier boards.…”

mentioning

confidence: 99%

Corporate Governance in Banks

John¹,

Masi²,

Paci³

2016

Corporate Governance

125

112

View full text Add to dashboard Cite

show abstract

“…Bank governance is measured by board size, independence, CEO duality, share of women in the board and disclosure of information related to executive remuneration. We follow previous studies in constructing the indicators of bank governance (Adams & Mehran, 2003;Andres, Romero-Merino, Santamaría, & Vallelado, 2012;Pathan, 2009) and bank disclosure measures (Song & Li, 2012). Board size is defined by the number of board members in each bank.…”

Section: Measurement Of Banks' Corporate Governancementioning

confidence: 99%

The Impact of Institutions on Bank Governance and Stability: Evidence from African Countries

2018

View full text Add to dashboard Cite

This paper sheds new light on how African countries' legal systems and institutions influence the governance and stability of their banks. We find that institutional factors, in particular the legal family of origin, political stability, contract enforcement and strength of investor protection promote central corporate governance reforms. Using a difference-in-difference approach, we also reveal that those reforms mediate the impact of institutions on banks. If countries have a corporate governance reform in place their banks show better internal governance and higher stability.

show abstract

“…Corporate governance broadly comprises board of directors, executive compensation, ownership structure, and so forth, where board characteristics and executive compensation occupy a very prominent position. Boards in banking and financial firms are different from nonfinancial firms as they are bigger and independent as compared with nonfinancial firms (de Andres, Romero‐Merino, Santamaría, & Vallelado, ). Also, board is more important in banks as compared with nonfinancial firms because in banks, their fiduciary responsibilities extend well beyond shareholders to regulators and depositors (Macey & O'Hara, ).…”

Section: Introductionmentioning

confidence: 99%

Corporate governance challenges in Indian banks: A public affairs perspective

Pant

Radhakrishnan

2019

Journal of Public Affairs

View full text Add to dashboard Cite

Weak governance framework in Indian public sector banks has paralyzed their performance with declining profitability and deteriorating asset quality. In order to tackle the governance issues in Public Sector Banks (PSBs), Indian government established Banks Board Bureau (BBB) in April 2016 to revamp the existing governance structure in PSBs. However, the issue management framework of establishing BBB is not immune to several challenges and has not been able to achieve its desired objectives. This paper looks at the weak governance issue in PSBs from an issue management perspective by using the famous Jones and Chase issue management framework. In light of this framework, the paper makes several recommendations to effectively address the governance challenges in PSBs in India. The findings of this paper may be useful for other emerging economies facing similar governance issues in their banking sector.

show abstract

Board Determinants in Banking Industry. An International Perspective

Cited by 22 publications

References 63 publications

Corporate Governance in Banks

Corporate Governance in Banks

The Impact of Institutions on Bank Governance and Stability: Evidence from African Countries

Corporate governance challenges in Indian banks: A public affairs perspective

Contact Info

Product

Resources

About