Influence of Board Composition on Agency Cost and Its Governance Outcomes

Baral, Riyanka; Patnaik, Debasis

doi:10.1007/978-3-030-60008-2_9

Cited by 1 publication

(1 citation statement)

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“…The shareholders elect the board of directors, which, respectively, hires managers who have managerial skills to manage organizations by generating profits in an ethical manner. The board of directors acts as an instrument for monitoring shareholders within the firm [13]. Managers have more power over the resources of a profit-oriented organization and tend to avoid providing information to shareholders, but instead focus on reinvesting their profits, which leads to agency costs [14].…”

Section: Introductionmentioning

confidence: 99%

Board Gender Diversity and Banks Profitability for Business Viability: Evidence from Serbia

Milojević¹,

Milašinović

Mitrović

et al. 2023

Sustainability

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As an important topic in the field of corporate governance, the influence of the board of directors’ characteristics on the profitability of corporations is examined here. This paper examines the influence of the board of directors’ and chief executive officers’ (CEO) characteristics on the profitability of banks in Serbia. In this study, the characteristics of boards of directors were examined in terms of size and the participation of women, and the characteristics of CEOs were examined similarly in terms of women’s participation. The research was conducted on a sample of 23 commercial banks from Serbia in the period from 2017 to 2021. Profitability was measured by the rate of return on operating assets (ROA) and the rate of return on equity (ROE). The results of the panel regression analysis indicate that the size of the board of directors had a positive impact on bank profitability during the COVID-19 pandemic period, while this impact was not statistically significant before the pandemic. The participation of women on the board of directors did not have a statistically significant impact on bank profitability before or during the COVID-19 pandemic. It has been found that the participation of women as CEOs had a negative impact on bank profitability before and during the COVID-19 pandemic.

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Section: Introductionmentioning

confidence: 99%