Do Risk Disclosures Matter for Bank Performance? A Moderating Effect of Risk Committee

ABSTRACT We report the results of two experiments that provide evidence that investors' risk judgments are affected by the numerical format used to describe outcomes within accounting disclosures. Consistent with prior research in psychology, investors assess higher risk in response to dollar-formatted disclosures than to equivalent percentage-formatted disclosures. Consistent with the Persuasion Knowledge Model (Friestad and Wright 1994), this effect is moderated when investors have both (1) awareness that management has discretion over format, and (2) sufficient cognitive capacity to consider its implications. Our results provide insight about the effects of current disclosure formats and suggest implications for managers who choose formats, investors who interpret formatted information, and regulators who consider whether to further prescribe the formats that are used in financial disclosures.

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Board of director’s characteristics and bank performance: Evidence from GCC region

Corporate Ownership and Control ◽

10.22495/cocv17i1art2 ◽

2019 ◽

Vol 17 (1) ◽

pp. 14-23 ◽

Cited By ~ 6

Author(s):

Ehab R. Elbahar

Keyword(s):

Audit Committee ◽

Banking Sector ◽

The Political ◽

Bank Performance ◽

Islamic Banks ◽

Board Of Director ◽

Gulf Countries ◽

Risk Committee ◽

Conventional Banks ◽

High Level

The main purpose of the current study is to examine the association between Corporate Governance’s (GC) variables represented by board characteristics and Bank performance measured by ROE and ROA in GCC banking sector. For the purposes of this study, the sample of 68 banks in gulf countries during the period from 2013 to 2017 have been selected and divided the data to Islamic banks and conventional banks (16 Islamic banks, 52 Non-Islamic). Furthermore this study uses the nonparametric regression OLS and Quantile analysis. The current study suggest that the existence of female directors on the board of director in last years is significantly associated with better performance, we concludes that females in GCC banking sector in latest years reached a high level of maturity in understanding banking industry. Furthermore, this study suggests that the audit committee associated positively and significantly with bank performance, it means that the audit committee in latest years plays important role in enhancing the performance. In addition to the above, the political member on the board and risk committee does not affect the performance significantly. Both of board size and Sharia committee are associated positively and significantly with performance.

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Risk disclosures and firm value: the role of governance in an emerging market

International Journal of Productivity and Performance Management ◽

10.1108/ijppm-09-2020-0476 ◽

2021 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Surbhi Jain ◽

Mehul Raithatha

Keyword(s):

Firm Value ◽

Good Governance ◽

Negative Impact ◽

Emerging Market ◽

Moderating Effect ◽

Least Square ◽

Governance Mechanism ◽

Content Type ◽

Risk Disclosures ◽

The Impact

PurposeThe objective of this paper is to investigate the impact of risk disclosures on firm value. We further investigate whether effective governance moderates the relation between risk disclosures and firm value.Design/methodology/approachWe use a sample of the top 200 Indian listed firms on NSE from 2013 to 2018. The generalised method of moments (GMM) along with the ordinary least square (OLS) is used to investigate our research problem. Further, we use the Propensity Score Matching (PSM) technique and the Heckman selection model for correcting selection bias in the robustness section.FindingsWe find that higher risk disclosures result in lower firm value. Besides, we show that better governance minimizes the negative impact of risk disclosures on firm value. This finding encourages firms to have a good governance mechanism to mitigate the adverse effects of risk disclosures in public.Originality/valueThe main contribution of our paper is to examine the moderating effect of governance between risk disclosures in the annual report and firm value (market-based and accounting-based) in the context of an emerging economy. Moreover, the paper highlights the potential moderating effect of independent directors and resourceful boards on the risk disclosures and firm value in the Indian context.

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How Does Corporate Governance Affect Bank Performance? The Mediating Role of Risk Governance

International Journal of Business and Management ◽

10.5539/ijbm.v13n10p212 ◽

2018 ◽

Vol 13 (10) ◽

pp. 212

Author(s):

Paola Leone ◽

Carmen Gallucci ◽

Rosalia Santulli

Keyword(s):

Corporate Governance ◽

Boards Of Directors ◽

Governance Structure ◽

Independent Directors ◽

Risk Governance ◽

Bank Performance ◽

Board Size ◽

Mediating Role ◽

Risk Committee

This paper aims to investigate how bank governance (board size, board composition, ownership structure) affects performance (ROA), by considering the mediating role of risk governance (presence of a risk committee, the number of meetings of the risk committee in one year, the risk committee size, the percentage of independent directors in the risk committee, and the presence of a chief risk officer). A sample of 31 Italian listed banks is examined over a ten-year period (2008-2017), in order to delineate the changes in corporate governance structure and to catch the effects of the current national and European regulations followed to the financial crisis. Hypotheses are tested by applying a mediation analysis according to the causal steps procedure. The main findings suggest that risk governance fully mediates the corporate governance-bank performance relationship. Specifically, we find that the board size is positively related to the presence of a risk committee and to the number of meetings. The percentage of independent directors on board is positively related to the percentage of independent directors in the risky committee and, in turn, has a positive effect on performance. Finally, the presence of institutional owners is positively related to the presence of a chief risk officer and, thus, to bank performance. Summing up, banks with wider and more heterogeneous boards of directors have better risk management-related corporate governance mechanisms and reach higher performance levels.

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The Moderating Effect of Corporate Governance on the Relationship between Government Intervention and Bank Performance: A Proposed Conceptual Framework

Journal of Advanced Research in Dynamical and Control Systems ◽

10.5373/jardcs/v12i3/20201213 ◽

2020 ◽

Vol 12 (3) ◽

pp. 451-465

Author(s):

Umar Muhammed Dikko

Keyword(s):

Corporate Governance ◽

Conceptual Framework ◽

Government Intervention ◽

Moderating Effect ◽

Bank Performance ◽

The Relationship

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Strong Boards, Risk Committee and Bank Performance: Evidence from India and China

CSR, Sustainability, Ethics & Governance - Corporate Governance in Emerging Markets ◽

10.1007/978-3-642-44955-0_4 ◽

2014 ◽

pp. 79-105

Author(s):

Francesca Battaglia ◽

Angela Gallo ◽

Anna Elvira Graziano

Keyword(s):

Bank Performance ◽

Risk Committee ◽

India And China

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The Effect of Liquidity Risk on Bank Performance: Moderating Effect of Board Size and Board Meeting

Jurnal Manajemen Teori dan Terapan | Journal of Theory and Applied Management ◽

10.20473/jmtt.v14i3.30470 ◽

2021 ◽

Vol 14 (3) ◽

pp. 346

Author(s):

Indira Nuansa Ratri

Keyword(s):

Linear Regression ◽

Multiple Linear Regression ◽

Crucial Role ◽

Stock Exchange ◽

Liquidity Risk ◽

Moderating Effect ◽

Bank Performance ◽

Board Meeting ◽

Conventional Banks ◽

Positive Effect

Bank performance is the most important thing to note and interesting to study because it plays a crucial role in a country's economy. This study aims to determine the effect of liquidity on bank performance and the moderating effect of the size and board meeting. The test in this study uses multiple linear regression on conventional banks listed on the Indonesia Stock Exchange from 2014 to 2019. The results of this study indicate that liquidity has a positive effect on bank performance, the size of the board of commissioners weakens the positive effect of liquidity on bank performance, and the number of board meeting weaken the positive effect of liquidity on bank performance.

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PENGARUH TATA KELOLA RISIKO TERHADAP KINERJA PERUSAHAAN PERBANKAN

Jurnal Penelitan Ekonomi dan Bisnis ◽

10.33633/jpeb.v4i2.2717 ◽

2019 ◽

Vol 4 (2) ◽

pp. 180-191

Author(s):

Faisal Faisal

Keyword(s):

Positive Impact ◽

Stock Exchange ◽

Risk Governance ◽

Bank Performance ◽

Governance Mechanism ◽

Risk Disclosure ◽

Public Companies ◽

Potential Risks ◽

Risk Committee ◽

Good Risk

This study examines the effect of risk governance on bank performance of Indonesian public companies. The sample consists of 86 banking companies listed on Indonesian Stock Exchange for period 2016-2017. The accounting-based and market-based approach were used to measure the performance, while risk governance disclosure was measured by risk disclosure, number of risk committee and frequency of risk committee meetings. The results of this study find that the extent of of risk disclosure and the number of risk committee have significantly effect both on accounting-based and market-based performance. However, this study failed to suggest that the frequency of risk committee meetings affect bank performance. The findings of this study suggest that the presence of good risk governance mechanism may reduce the potential risks faced by banking companies while providing a positive impact on the performance.

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