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Strong boards, CEO power and bank risk-taking

Lookup NU author(s): Dr Shams PathanORCiD

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Abstract

This study examines the relevance of bank board structure on bank risk-taking. Using a sample of 212 large US bank holding companies over 1997-2004 (1534 observations), this study finds that strong bank boards (boards reflecting more of bank shareholders interest) particularly small and less restrictive boards positively affect bank risk-taking. In contrast, CEO power (CEO's ability to control board decision) negatively affects bank risk-taking. These results are consistent with the bank contracting environment and robust to several proxies for bank risk-takings and different estimation techniques. © 2009 Elsevier B.V. All rights reserved.

Publication metadata

Author(s): Pathan S

Publication type: Article

Publication status: Published

Journal: Journal of Banking and Finance

Year: 2009

Volume: 33

Issue: 7

Pages: 1340-1350

Print publication date: 01/07/2009

Online publication date: 10/02/2009

ISSN (print): 0378-4266

ISSN (electronic): 1872-6372

Publisher: Elsevier BV

URL: https://doi.org/10.1016/j.jbankfin.2009.02.001

DOI: 10.1016/j.jbankfin.2009.02.001

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