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Strong boards, CEO power and bank risk-taking

  • Pathan, Shams

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.

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File URL: http://www.sciencedirect.com/science/article/B6VCY-4VK6N98-1/2/dd8d414c3c59b674d3554639cb8b429c
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Article provided by Elsevier in its journal Journal of Banking & Finance.

Volume (Year): 33 (2009)
Issue (Month): 7 (July)
Pages: 1340-1350

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Handle: RePEc:eee:jbfina:v:33:y:2009:i:7:p:1340-1350
Contact details of provider: Web page: http://www.elsevier.com/locate/jbf

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