Board, ownership and performance of banks with a dual board system: Evidence from Taiwan

2010 ◽  
Vol 16 (2) ◽  
pp. 219-234 ◽  
Author(s):  
Chi-Jui Huang
Keyword(s):  
Corporate Governance ◽  
Empirical Support ◽  
Developed Countries ◽  
Negative Influence ◽  
Bank Performance ◽  
Board Structure ◽  
Outside Directors ◽  
Industrial Enterprises ◽  
And Performance ◽  
Board System

AbstractThe influence of corporate governance on a firm's performance has recently been studied in industrial enterprises in developed countries, but not in services such as banks with a dual board system in Asia's newly-industrialized economies (NIEs). This research examines the effects of board structure and ownership on a bank's performance using a sample of 41 commercial banks in an Asian NIE (Taiwan). Results showed that board size, numbers of outside directors, and family-owned shares are positively associated with bank performance, whereas the number of supervisory directors has a negative influence on performance. The findings provide empirical support for corporate governance, which improves the performance of banks with a dual board system in Taiwan.

Board, ownership and performance of banks with a dual board system: Evidence from Taiwan

2010 ◽  
Vol 16 (2) ◽  
pp. 219-234 ◽  
Author(s):  
Chi-Jui Huang
Keyword(s):  
Corporate Governance ◽  
Empirical Support ◽  
Developed Countries ◽  
Negative Influence ◽  
Bank Performance ◽  
Board Structure ◽  
Outside Directors ◽  
Industrial Enterprises ◽  
And Performance ◽  
Board System

AbstractThe influence of corporate governance on a firm's performance has recently been studied in industrial enterprises in developed countries, but not in services such as banks with a dual board system in Asia's newly-industrialized economies (NIEs). This research examines the effects of board structure and ownership on a bank's performance using a sample of 41 commercial banks in an Asian NIE (Taiwan). Results showed that board size, numbers of outside directors, and family-owned shares are positively associated with bank performance, whereas the number of supervisory directors has a negative influence on performance. The findings provide empirical support for corporate governance, which improves the performance of banks with a dual board system in Taiwan.

scholarly journals The two-tier board system and underpricing of initial public offerings: Evidence from Austria

2014 ◽  
Vol 12 (1) ◽  
pp. 352-362
Author(s):  
Lalith P. Samarakoon ◽  
Palani-Rajan Kadapakkam
Keyword(s):  
Corporate Governance ◽  
Agency Theory ◽  
Initial Public Offerings ◽  
Stock Exchange ◽  
Supervisory Board ◽  
Board Structure ◽  
Ipo Underpricing ◽  
Public Offerings ◽  
Management Board ◽  
Board System

We study the relation between initial IPO underpricing and two-tier board structure in the Vienna Stock Exchange of Austria, where a two-tier board is mandatory for listed companies. The board ratio, defined as the size of the supervisory board to the management board, is used to capture the effect of two-tiered board on underpricing. The results show that the board ratio is negatively related with underpricing, consistent with the agency theory which predicts that more effective monitoring implied in a relatively larger supervisory board will lead to lower agency costs, and thus lower underpricing. The results are robust to the inclusion of control variables and suggest that firms seeking to raise external capital will be helped by adopting strong corporate governance standards.

What drives board committee structure? Evidence from an emerging market

2019 ◽  
Vol 35 (3) ◽  
pp. 373-397 ◽  
Author(s):  
Pornsit Jiraporn ◽  
Ali Uyar ◽  
Cemil Kuzey ◽  
Merve Kilic
Keyword(s):  
Corporate Governance ◽  
Audit Quality ◽  
Emerging Market ◽  
Panel Data Analysis ◽  
Positive Association ◽  
Developed Countries ◽  
Board Structure ◽  
Ceo Duality ◽  
Content Type ◽  
Board Committees

Purpose Board committees enable boards to function effectively, as committees improve the quality of corporate governance by fulfilling specific, assigned tasks. This study aims to explore how board structure, CEO duality and audit quality are associated with board committee structure in the context of an emerging market, namely, Turkey. Design/methodology/approach The sample consisted of 122 firms listed on the Industrial Index of Borsa Istanbul for the years between 2012 and 2014, inclusive, and this yielded 366 firm-year observations. To test the hypotheses, the panel data analysis method was used, which enabled the elimination of certain problems, such as multicollinearity and estimation bias, as well as specification of the time-variant association between the predictor variables and the output variable. Findings Board size, board independence and firm size had a positive association with the number and size of board committees, whereas CEO duality had a negative association with the number and size of board committees. Moreover, the appointment of female members on audit and corporate governance committees was more frequent in firms that had a high proportion of women on their boards. Finally, audit quality was positively associated with the existence of risk committee, the overall diversity of board committees and the diversity of corporate governance committees. Research limitations/implications The study is not free from limitations. It covers the time span between 2012 and 2014; thus, readers should be cautious about generalizing these results longitudinally, as a different time periods could possibly yield different results. The second limitation concerns the fact that only industrial firms were sampled; thus, these findings may not be valid in other sectors. Practical implications The paper shifts the attention of researchers from overall board structure to board committee structure. The results of the study provide insights for policymakers, boards and shareholders. Policymakers can formulate boards and committees by considering these findings. Boards can benefit from the conclusions of this study in shaping their own structure and sub-committee structures. Current and potential shareholders may find the results of the study instructive in making investment decisions. Originality/value This study investigates the factors associated with the structure of overall and specific board committees. Additionally, while most prior research on board committees has sampled firms that are domiciled in developed countries, this study examines the subject in an emerging country context, namely Turkey. Moreover, this study adds to the literature by examining the association between audit quality and board committee structure, which has been largely neglected in prior literature.

Risk governance and performance: a developing country perspective

2016 ◽  
Vol 31 (3) ◽  
pp. 250-268 ◽  
Author(s):  
Shamsun Nahar ◽  
Christine Jubb ◽  
Mohammad I Azim
Keyword(s):  
Significant Relationship ◽  
Global Financial Crisis ◽  
Developed Countries ◽  
Risk Governance ◽  
Bank Performance ◽  
Risk Disclosure ◽  
Content Type ◽  
Return On Equity ◽  
And Performance ◽  
The Global Financial Crisis

Purpose – The purpose of this paper is to investigate the association between risk governance and bank performance in a country where disclosure of risk information is virtually voluntary. Design/methodology/approach – Using 210 bank-year observations comprising hand-collected data for the period 2006-2012, the study uses regression analysis to test whether a significant relationship exists between risk governance and banks’ accounting- and market-based performance. Findings – This paper investigates risk governance in terms of risk disclosure, number of risk committees and existence of a risk management unit, controlling for other corporate governance variables. Accounting-based performance is measured by return on equity and return on assets; market-based performance is measured by Tobin’s q and buy-and-hold returns. The results show that there is a significant relationship between risk governance and bank performance measures used in this study. Research limitations/implications – This paper complements the governance literature by incorporating agency and neo-institutional theory to provide robust evidence that risk monitoring and management are associated with bank performance, which has become extremely important following the global financial crisis (2007-2008). Practical implications – Empirical evidence in this paper suggests that risk governance characteristics can be used as channels to improve bank performance. In addition, stakeholders may find these results useful in selecting their preferred bank. Originality/value – The uniqueness of this paper lies in its country setting. Most studies on governance and performance involve developed countries. This paper’s contribution is to examine the association of risk governance characteristics for both accounting-based and market-based performance in a developing economy setting, with virtually voluntary compliance mechanisms in place.

scholarly journals Corporate Governance in Banks and its Impact on Risk and Performance: Review of Literature on the Selected Governance Mechanisms

2014 ◽  
Vol 3 (3) ◽  
pp. 53-85
Author(s):  
Shkendije Himaj
Keyword(s):  
Corporate Governance ◽  
Risk Taking ◽  
Theoretical Background ◽  
Board Structure ◽  
Governance Mechanisms ◽  
Performance Review ◽  
Performance Effects ◽  
And Performance ◽  
The Impact ◽  
Insight Into

Abstract Corporate governance is viewed as an important, essential, and most significant factor for well-functioning of firms. Recent academic work and policy analyses have given insight into the governance problems in banks exposed to the financial crisis and suggest possible solutions. This paper begins by explaining the importance of corporate governance and its impact on risk taking and bank performance based on the theoretical background relevant to the corporate governance of banks. I combine the literature that looks at three areas of governance: ownership structure; board structure; and risk management, with the literature on risk-taking and performance effects in order to better assess the weight of the impact that these governance mechanisms have on both performance and risk. The paper concludes by highlighting the areas where further research is needed.

scholarly journals Developments in the european banking industry

2009 ◽  
Author(s):  
Μαρία-Ελένη Αγοράκη
Keyword(s):  
Corporate Governance ◽  
Banking Industry ◽  
Board Structure ◽  
Governance System ◽  
Firm Financial Performance ◽  
Governance Challenges ◽  
The Board Of Directors ◽  
European Banking ◽  
European Banks ◽  
And Performance

Corporate governance has become a leading topic of research, considering its importance as an implement for transparency in financial markets and corporations. On the other hand, the role of the banks is fundamental in any economy that urges for strong corporate governance. Banks are “special” financial institutions posing unique corporate governance challenges. However, very little attention has been paid to the corporate governance of banks. Recent scandals in the financial sector have brought corporate governance at the forefront of academic and supervisory attention. Banks’ versatile role in the economic system has caught regulatory and supervisory interest around the world in an effort to inspire high quality corporate governance standards. Board structure, in the sense of board size and composition, and its impact on corporate performance constitutes an indispensable and, at the same time, prevalent theme of the corporate governance discussion. This thesis examines corporate governance issues in the European banking industry. More specifically, it examines the relationship between board structure and performance, on a sample of 57 large European banks, over the period 2002-2006. The board structure mechanisms applied, are the size of the board of directors and the percentage of non-executives on the board. In addition, this study employs different measures of firm financial performance both market-based and accounting based. Control variables for the bank size and risk as well as for the different corporate governance system are included in the models. The empirical analysis also incorporates a number of bank-specific variables. […]

scholarly journals Corporate Image Management and Bank Performance in Nigeria

2021 ◽  
Vol 04 (05) ◽  
Author(s):  
Patrick Ologbenla ◽  
Keyword(s):  
Corporate Governance ◽  
Panel Data Analysis ◽  
Random Effect ◽  
Customer Retention ◽  
Secondary Data ◽  
Corporate Image ◽  
Bank Performance ◽  
Image Management ◽  
And Performance ◽  
The Relationship

The lack of consensus on the relationship between corporate image management and bank performance prompted this research. The study investigates the relationship between corporate image management and performance of deposit money banks in Nigeria between 2007 and 2017. Quantitative approach of methodology where secondary data are collected analysed on relevant variables for eight deposit money banks which include the five tier one lenders and three tier two lenders is applied. Panel data analysis is adopted as the estimating technique. From the result, the random effect result shows that only corporate governance out of the proxies of corporate image management has significant impact on customer retention of the banks. Both corporate social responsibility and environmental responsibility failed to have significant impact on customer retention. The study recommends that that the banks should continue improving on their corporate governance as it is a good measure of corporate image management that contribute significantly to their performance.

scholarly journals BOARD STRUCTURE AND BANK PERFORMANCE: EVIDENCE FROM SERBIAN BANKING SECTOR

2020 ◽  
pp. 057
Author(s):  
Verica Babić ◽  
Jelena Nikolić ◽  
Marijana Simić
Keyword(s):  
Corporate Governance ◽  
Banking Sector ◽  
Bank Performance ◽  
Board Composition ◽  
Board Structure ◽  
Governance Mechanism ◽  
Board Size ◽  
Data Set ◽  
Corporate Governance Mechanism ◽  
The Impact

Traditional perspective relying on agency theory is based on the assumption that the board structure, as an internal corporate governance mechanism, determines board effectiveness and, therefore, financial performance. Board size, board composition and leadership structure are distinguished as relevant variables of the board structure. Since the results of previous empirical studies are often contradictory, examining the correlation between board structural characteristics and corporate performance is a relevant research question, particularly in banking sector. In order to improve effectiveness of internal corporate governance mechanism, and consequently bank performance, the main research objective is to identify the impact of the board size and the board composition on bank performance in the Republic of Serbia using the CAMELS model. We analyze this relation using Ordinary Least Squares regression analysis on balanced panel data-set of 54 observations. The paper contributes to recent research efforts by making conclusions on the effects of board structure on bank performance, in order to define recommendations for improving performance in banking sector. 

scholarly journals Ownership, board structure, and corporate performance: Evidence of French VC-backed firms

2010 ◽  
Vol 6 (3) ◽  
pp. 7-20 ◽  
Author(s):  
Amina Hamdouni
Keyword(s):  
Firm Performance ◽  
Venture Capital ◽  
Ownership Structure ◽  
Ownership Concentration ◽  
Board Structure ◽  
Outside Directors ◽  
Strong Relation ◽  
And Performance ◽  
Capital Ownership ◽  
Director Ownership

The purpose of this paper is to examine the effect of ownership structure and board structure on performance in VC-backed firms. Using 106 French VC-backed firms, our methodology in this paper is to estimate four equations. A regression analysis is then used to study the impact of ownership structure and board structure on performance and also to analyze whether ownership structure (ownership concentration, director ownership, venture capital ownership and employee ownership) and board variables (size, outside directors, COE-chairman duality, proportion of VC directors, proportion of employee directors and board meeting frequency) are significant determinants of VC-backed firm performance. Results indicate a strong positive relation between ownership concentration and performance and between director ownership and performance measured by ROE. And strong negative relation between ownership concentration and performance and between director ownership and performance measured by ROA. No strong relation was found between venture-capital ownership, employee ownership and firm performance. Results show also a strong negative relation between board size and performance measured by ROE and positive relation between board size and performance measured by ROA, Tobin’s Q and MVA. The proportion of independent outside directors on the board was positively associated with ROE and negatively associated with ROA. The presence of a dual leadership structure is negatively associated with ROE and positively associated with ROA. No strong relation was found between the proportion of venture-capital in board, the presence of employee in board, or board meeting frequency and firm performance.

scholarly journals Positive contribution of the good corporate governance rating to stability and performance: evidence from Indonesia

2018 ◽  
Vol 16 (2) ◽  
pp. 1-11 ◽  
Author(s):  
RR. Iramani ◽  
Muazaroh Muazaroh ◽  
Abdul Mongid
Keyword(s):  
Corporate Governance ◽  
Empirical Evidence ◽  
Capital Market ◽  
Bank Performance ◽  
Positive Contribution ◽  
Bank Stability ◽  
Good Corporate Governance ◽  
And Performance ◽  
Public Banks ◽  
The Impact

This paper aims to examine the impact of Good Corporate Governance (GCG) practice on bank stability and performance. Governance is measured using the GCG rating that covers eleven aspects. The authors apply instrumental regression to link governance to performance and stability. The study covers a sample of 150 banks. The result shows that bank stability can mediate bank governance and bank performance. On the determinant of bank performance, it can be concluded that the GCG rating is positive and directly influences bank performance. Bank stability is also positive for bank performance indicating the indirect contribution of the GCG rating to bank performance. NPL, LDR, CAR and bank’s size (LASSET) are all negative and significant. The aim of this paper is to provide strong empirical evidence on the importance of governance and stability for performance. The limitations of this paper are the size of the sample and that it only covers public banks which are theoretically required to apply better governance in all aspects of their business by the Capital Market Authority.

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