Sitting on the Fence: Does Having a "Dual-Director" Add to Bank Profitability?
This paper investigates how the combination of positions of the Board of Directors and management affects bank's profitability. We use the 2010 bank-level data from 112 countries. Our results show that the positions' combination reduces banks' ROE. However, for banks in developing countries, the influence is close to zero and even positive for some specifications. We also show that the higher is the proportion of the Board members, who also hold a managerial position the lower is the profitability of a bank. This effect is, however, close to zero for banks in the developing countries. Thus, the corporate governance regulation should go beyond a simple restriction on holding simultaneously the CEO and the head of Board of Directors positions. The exception should be made for the developing countries, where the additional restrictions are not necessary.
Volume (Year): 20 (2013)
Issue (Month): 4 ()
|Contact details of provider:|| Postal: Nakhimovsky prospekt, 32, Office 1115, 117218 Moscow Russia|
Phone: +7 495 7189855
Fax: +7 495 7189855
Web page: http://www.econorus.org/english.phtml
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- John Griffith & Lawrence Fogelberg & H. Weeks, 2002. "CEO ownership, corporate control, and bank performance," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 26(2), pages 170-183, June.
- Maria Semenova & Polina Savchenko, 2015.
"Sitting on the fence: does having a 'dual-director' add to bank profitability?,"
Applied Economics Letters,
Taylor & Francis Journals, vol. 22(8), pages 654-657, May.
- Savchenko, P. & Semenova, M., 2013. "Sitting on the Fence: Does Having a "Dual-Director" Add to Bank Profitability?," Journal of the New Economic Association, New Economic Association, vol. 20(4), pages 12-32.
- Polina Savchenko & Maria Semenova, 2013. "Sitting on the fence: does having a ‘dual-director’ add to bank profitability?," HSE Working papers WP BRP 16/FE/2013, National Research University Higher School of Economics.
- Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
- Berger, Allen N. & Kick, Thomas & Schaeck, Klaus, 2014. "Executive board composition and bank risk taking," Journal of Corporate Finance, Elsevier, vol. 28(C), pages 48-65.
- Berger, Allen N. & Kick, Thomas & Schaeck, Klaus, 2012. "Executive board composition and bank risk taking," Discussion Papers 03/2012, Deutsche Bundesbank, Research Centre.
- Allen N. Berger & Thomas Kick & Klaus Schaeck, 2012. "Executive Board Composition and Bank Risk Taking," Working Papers 12004, Bangor Business School, Prifysgol Bangor University (Cymru / Wales).
- Brickley, James A. & Coles, Jeffrey L. & Jarrell, Gregg, 1997. "Leadership structure: Separating the CEO and Chairman of the Board," Journal of Corporate Finance, Elsevier, vol. 3(3), pages 189-220, June.
- Mohamed Belkhir, 2009. "Board structure, ownership structure and firm performance: evidence from banking," Applied Financial Economics, Taylor & Francis Journals, vol. 19(19), pages 1581-1593.
- Webb Cooper, Elizabeth, 2009. "Monitoring and governance of private banks," The Quarterly Review of Economics and Finance, Elsevier, vol. 49(2), pages 253-264, May.
- Claessens, Stijn & Yurtoglu, B. Burcin, 2013. "Corporate governance in emerging markets: A survey," Emerging Markets Review, Elsevier, vol. 15(C), pages 1-33.
- Yeh, Yin-Hua & Woidtke, Tracie, 2005. "Commitment or entrenchment?: Controlling shareholders and board composition," Journal of Banking & Finance, Elsevier, vol. 29(7), pages 1857-1885, July.
- Pi, Lynn & Timme, Stephen G., 1993. "Corporate control and bank efficiency," Journal of Banking & Finance, Elsevier, vol. 17(2-3), pages 515-530, April.
- Eralp Bektas & Turhan Kaymak, 2009. "Governance Mechanisms and Ownership in an Emerging Market: The Case of Turkish Banks," Emerging Markets Finance and Trade, M.E. Sharpe, Inc., vol. 45(6), pages 20-32, November. Full references (including those not matched with items on IDEAS)