Board Size, Board Composition and Performance: An Investigation on Turkish Banks

Işık, Özcan; İnce, Ali Rıza

doi:10.5539/ibr.v9n2p74

Cited by 44 publications

(40 citation statements)

References 43 publications

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“…Our result may support earlier empirical studies such as Isik and Ince (2016), Hsu and Xuesong (2016), Adams and Mehran (2012), Dalton et al (1998) insisting that a certain effect of the economies of scale in resource, experience and information sharing among the board members is pointed out behind this positive relationship between the board size and the performance. However, we should note that behind our case (a positive relationship) there was a certain pressure for the banks to increase the ratio of independent directors on the board.…”

Section: Discussionsupporting

confidence: 91%

An Analysis of Codified Corporate Governance Practices in the Banking Industry: The Case Study of Bangladesh

Suzuki

Hasan

2018

E-Finanse

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Introducing a well-designed system of corporate governance is considered an effective tool to ensure the stability and resilience of a banking system. It was in 2006 when Bangladesh initiated its first corporate governance code (CG code). Despite trying to meet the code of enhancing the internal monitoring mechanisms and transparency in governance, it is apparent that the quality in bank credit portfolios continuously deteriorated. This paper aims to empirically analyze the impact of adopting the CG code on performance for eight years (2010-2017) of 21 major commercial banks of Bangladesh. In this case study, we suggest that the CG code may have given the Bangladeshi commercial banks an ill-incentive for the reduction of executive directors under the pressure of meeting a guideline to increase the ratio of independent directors. This incentive structure had a negative impact on bank performance during the period. Another finding is that the fundamental structure of ownership and control by sponsor directors remained unchanged during the period. This structure of maintaining the control of power by a group with its vested interest may have hindered the effectiveness of the CG code in Bangladesh. We suggest that the agenda of CG practices should go together with a policy for mitigating a potential bias under the ownership concentration because any attempt of adopting codified CG practices would be futile under the fundamental structure in Bangladesh. An analysis of codified corporate governance practices in the banking industry: the case study of Bangladesh C. The effect of independent/explanatory variables on dependent variable non performing loan (NPL) D. The effect of independent/explanatory variables on dependent variable cost of funds (COF)

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Section: Discussionsupporting

confidence: 91%

An Analysis of Codified Corporate Governance Practices in the Banking Industry: The Case Study of Bangladesh

Suzuki

Hasan

2018

E-Finanse

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“…-Board Size (BORDSIZE): the board of directors takes decisions that are fundamental to the firm's performance. It is consider as a complementary part of internal governance techniques through which decisions and behavior of managers can be controlled (Isik & INCE, 2016). Jensen, 1993Yermack, 1996;Coles;Daniel;and Naveen, 2008, etc. had focused on the size of the Board of Directors (Dang, et al,2018).…”

Section: Control Variablesmentioning

confidence: 99%

“…Jensen, 1993Yermack, 1996;Coles;Daniel;and Naveen, 2008, etc. had focused on the size of the Board of Directors (Dang, et al,2018). In relation to this study, the size of the Board of Directors will be treated as a control variable to control the relation between the audit partner tenure and audit fees, it will expressed by the total number of inside and outside directors on the board of the directors (Isik & INCE, 2016).…”

Section: Control Variablesmentioning

confidence: 99%

Audit Partner Tenure, Audit Quality and Audit Fees: Evidence from Jordanian Firms

Warrad¹

2018

IJBSS

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Audit tenure, audit quality and audit fees are important variables that have been studied and searched on the basis of auditing researches. The current study was conducted on a sample of 30 manufacturing companies listed on Amman Stock Exchange (ASE) from 2011 to 2015; the objective of this study is to examine the correlation between audit fees in these companies and the audit partner tenure (TENURE), on the one hand, and the correlation between audit fees (AUDFEES) and the audit quality (AQ) expressed in Big audit firms (BIG4) in the existence of three control variables; company size (COMPSIZE), return on asset (ROA) and board size (BORDSIZE). The findings of the study resulted in the following: audit partner tenure (TENURE) is an independent variable that is important for the explanation of the Jordanian manufacturing companies' audit fees (AUDFEES), and the audit quality (AQ) is an independent variable that is important for the explanation of the Jordanian manufacturing companies' audit fees (AUDFEES).

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“…Board of directors has a control, strategic and resource provision roles the supervisory board "can help the firm connect with the relevant segments and environmental constituencies". Isik and Ince [8] argued that board of directors is a cornerstone in the governance mechanism. They explored the relationship between board size and board composition on performance for a sample of 30 commercial banks from 2008 to 2012 in Turkey.…”

Section: Role and Responsibility Of Board Of Directors In Corporate Gmentioning

confidence: 99%

Corporate Governance and Board of Directors Responsibilities: The Case of Saudi Arabia

Zerban¹,

Abdullah²,

Abdullateef³

2017

Int J Account Res

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IntroductionCorporate governance had gain popularity nowadays specially after the collapses of many companies who appeared giant and efficient while actually they were fragile. Expropriation of stakeholders by senior managers is widely evident with the collapses of companies such as Enron which is symbolic of shareholders failure to protect their interests due to asymmetrical information and conflict of interest in board of directors [1]. The inefficiency of corporate governance mechanisms in banks and financial institutions are blamed in each crises. However, after absorbing the impact of failure, many opinions call for re-designing corporate governance mechanisms to ensure board responsibility and accountability, risk management, transparency and disclosure in financial reports [2]. Despite the negative impact of Enron collapse, the case "has done for reflection on corporate governance what AIDS did for research on the immune system" [3]. The ties between executive managers and shareholders were destroyed because of manager's greed and willingness to benefit themselves over shareholders interest. Although shareholders should be supported by board and have a special position in the front line of interest to managers as providers of capital, sometimes board of directors do not choose to act and other times were myopic. Ibid: (p. 6) States: Boards of Directors often conspired with the executives (because the executives and their friends sat on the Board, controlling the agenda and directing important committees), or failed to exercise sufficient diligence in monitoring the executives; the shareholders, especially large institutional shareholders, paid insufficient attention to the quality of the Boards and to the reports of external auditors.According to stakeholders' theory, managers should make decisions that are in the best interest of stakeholders. However, Jensen[2] criticizes the ability of managers to satisfy all stakeholders at the same time and in this case the theory is "unassailable". As when a manager is trying to maximize shareholders wealth, current profits, market share, future growth in profits can destroy his ability to take the right decision. As "A manager directed to maximize both profit and market share has no way to decide where to be in the range between maximum profits and maximum market share". Managers under the supervision of the board should take all different dimensions in mind for the well-being of the firm and welfare of society. It is necessary to have internal control system to limit managerial actions. He states: (p. 242) Because stakeholder theory provides no criteria for what is better or what is worse, it leaves boards of directors and executives in firms with no principled criterion for problem solving … it leaves managers and directors unaccountable for their stewardship of the firm's resources. With no criteria for performance, managers cannot be evaluated in any principled way. Therefore, stakeholder theory plays into the hands of selfinterested managers allowing them to p...

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Board Size, Board Composition and Performance: An Investigation on Turkish Banks

Cited by 44 publications

References 43 publications

An Analysis of Codified Corporate Governance Practices in the Banking Industry: The Case Study of Bangladesh

An Analysis of Codified Corporate Governance Practices in the Banking Industry: The Case Study of Bangladesh

Audit Partner Tenure, Audit Quality and Audit Fees: Evidence from Jordanian Firms

Corporate Governance and Board of Directors Responsibilities: The Case of Saudi Arabia

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