Board of Directors' Size and Performance in the Banking Industry

2008 ◽  
Author(s):  
Mohamed Belkhir
Keyword(s):  
Board Of Directors ◽  
Banking Industry ◽  
And Performance

Board of directors' size and performance in the banking industry

2009 ◽  
Vol 5 (2) ◽  
pp. 201-221 ◽  
Author(s):  
Mohamed Belkhir
Keyword(s):  
Board Of Directors ◽  
Boards Of Directors ◽  
Banking Industry ◽  
Poor Performance ◽  
Governance Mechanism ◽  
Past Performance ◽  
Board Size ◽  
Content Type ◽  
And Performance ◽  
The Relationship

PurposeThis paper aims to investigate the relationship between board size and performance in a sample of 174 bank and savings‐and‐loan holding companies, over the period 1995‐2002.Design/methodology/approachIn order to examine the relationship between board of directors' size and performance in the banking industry, the paper uses various statistical tools, including panel univariate analyses and panel data techniques.FindingsContrary to theories predicting that smaller boards of directors are more effective, increasing the number of directors in banking firms does not undermine performance. In contrast, the evidence is in favor of a positive relationship between board size and performance, as measured by Tobin's Q and the return on assets. The paper investigates whether this positive association is due to the fact that banks reduce the number of their directors in the aftermath of poor performance by testing for the relationship between board size and performance. The findings show that the number of directors leaving the board and the number of those joining the board for the first time increase following a poor performance, but the net change in board size is not affected by past performance.Research limitations/implicationsThe paper recognizes that a number of factors that are not controlled for in this study might be behind the positive empirical association between board size and the performance measures used.Practical implicationsThe results of this study suggest that the calls to reduce the number of directors in banks might have adverse effects on performance.Originality/valueThis paper contributes to the banking literature by investigating the relationship between an important governance mechanism, the board of directors, and performance in banking firms.

scholarly journals Directorship, collateralized shares, risk, and performance of Taiwan banking industry

2008 ◽  
Vol 6 (Special Issue 1) ◽  
pp. 57-71
Author(s):  
Yi-Kai Chen ◽  
Lanfeng Kao ◽  
Alan T. Wang ◽  
Ming–Hsuan Hsieh
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Banking Industry ◽  
Stock Exchange ◽  
Securities Market ◽  
Bank Risk ◽  
Taiwan Stock Exchange ◽  
Monitoring Mechanism ◽  
The Board Of Directors ◽  
And Performance

In recent years, considerable concerns have arisen over the issue of corporate governance in banks’ supervision. One of the major issues has been investigated whether the sound mechanism of corporate governance benefits bank risk management and performance. The collateralized shares, serving stocks as collaterals, are one of financial leverage approaches and it is likely to be an incentive for block shareholders to misapply assets due to the deviation between the controlship and the ownership. The objective of this study is to examine whether the attitude of the board of directors toward risk will affect the bank risk and performance. Quarterly data of commercial banks listed either on the Taiwan Stock Exchange or GreTai Securities Market from 1999 to 2007 are examined in this study. The results show that the collateralized shares may have contributed to a lower return due to a higher risk and they are in line with previous studies our results are in line with previous researches. In conclusion, the monitoring mechanism should enforce relatively regulations more strictly to avoid the agency problems. Especially to the insiders of influence such as board of directors or block shareholders, more strictly regulations and the disclosure of relatively information should be necessary. The result will be expected to lead to better understanding of the nature of the collateralized shares and laying the groundwork for realizing that is the collateralized shares worth monitoring. It may provide policy implication for the regulators in the later monitoring requirement.

scholarly journals Predicting Bank Operational Efficiency Using Machine Learning Algorithm: Comparative Study of Decision Tree, Random Forest, and Neural Networks

2020 ◽  
Vol 2020 ◽  
pp. 1-12
Author(s):  
Peter Appiahene ◽  
Yaw Marfo Missah ◽  
Ussiph Najim
Keyword(s):  
Machine Learning ◽  
Random Forest ◽  
Decision Tree ◽  
Banking Sector ◽  
Banking Industry ◽  
Predictive Accuracy ◽  
Learning Algorithm ◽  
Machine Learning Algorithms ◽  
Machine Learning Algorithm ◽  
And Performance

The financial crisis that hit Ghana from 2015 to 2018 has raised various issues with respect to the efficiency of banks and the safety of depositors’ in the banking industry. As part of measures to improve the banking sector and also restore customers’ confidence, efficiency and performance analysis in the banking industry has become a hot issue. This is because stakeholders have to detect the underlying causes of inefficiencies within the banking industry. Nonparametric methods such as Data Envelopment Analysis (DEA) have been suggested in the literature as a good measure of banks’ efficiency and performance. Machine learning algorithms have also been viewed as a good tool to estimate various nonparametric and nonlinear problems. This paper presents a combined DEA with three machine learning approaches in evaluating bank efficiency and performance using 444 Ghanaian bank branches, Decision Making Units (DMUs). The results were compared with the corresponding efficiency ratings obtained from the DEA. Finally, the prediction accuracies of the three machine learning algorithm models were compared. The results suggested that the decision tree (DT) and its C5.0 algorithm provided the best predictive model. It had 100% accuracy in predicting the 134 holdout sample dataset (30% banks) and a P value of 0.00. The DT was followed closely by random forest algorithm with a predictive accuracy of 98.5% and a P value of 0.00 and finally the neural network (86.6% accuracy) with a P value 0.66. The study concluded that banks in Ghana can use the result of this study to predict their respective efficiencies. All experiments were performed within a simulation environment and conducted in R studio using R codes.

Board of directors and CSR disclosure in Indonesian banking industry: does education matter?

2017 ◽  
Vol 10 (4) ◽  
pp. 322
Author(s):  
Ade Sofyan Mulazid ◽  
Abdul Hamid Habbe ◽  
Idris Idris ◽  
Efrizal Syofyan ◽  
Muhammad Agung Prabowo ◽  
...  
Keyword(s):  
Board Of Directors ◽  
Banking Industry ◽  
Csr Disclosure

scholarly journals Determinants of Bank Profitability

2021 ◽  
Vol 9 (2) ◽  
pp. 1-14
Author(s):  
Yasmeen Sultan ◽  
Keyword(s):  
Research Study ◽  
Banking Industry ◽  
External Factors ◽  
Adverse Impact ◽  
Financial Intermediaries ◽  
Internal Factors ◽  
Bank Profitability ◽  
Factors Affecting ◽  
Price Increases ◽  
And Performance

Banks are the most vital financial intermediaries in economy, which has a profitable banking industry; in order to survive undesirable shock as well as subsidize the constancy under the whole economy. However, the main purpose of this research is in the direction of analyzing factors affecting banks’ effectiveness all over Pakistan by means of sets of targeted facts and figures of twenty panels from 2005 to 2015. This study is developed with the help of AOLS technique which is used to examine the effect of different factors such as resources, debts, justice, securities, economic growth, price increases, price decreases, and market capitalization on major profitability signs such as (ROA), (ROE), (ROCE) and (NIM). The experimental consequences analyzed solid facts which stated the following conclusion, i.e., internal factors and external factors create an adverse impact on the level of profitability. An outcome by this research is important to different researchers. This research study proposed that by the concentration & reengineering the internal drivers the banks can improve its profitability and performance.

scholarly journals State Ownership and Risk-Taking Behaviour: Evidence from Malaysia’s Banking Industry

2020 ◽  
Vol 15 ◽  
pp. 65-94
Author(s):  
Ai-Xin Lee ◽  
Chee-Wooi Hooy
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Significant Role ◽  
Risk Taking ◽  
Commercial Banks ◽  
Banking Industry ◽  
State Ownership ◽  
Government Ownership ◽  
Corporate Governance Mechanisms ◽  
The Relationship

This study investigates state ownership on risk-taking behaviour in Malaysia’s banking industry. Using the panel of Malaysian commercial banks, this paper examines whether banks’ risk-taking is affected by Malaysian government ownership through the five largest investment arms of Malaysia (GLICs). The findings show that state-owned banks exhibit higher risk-taking behaviour compared to the private-owned banks in terms of loans. There is evidence that a higher degree of state ownership has a more significant impact on banks’ risk-taking behaviour. We also investigate the relationship with corporate governance mechanisms. The findings suggest that the composition of board of directors somehow plays a significant role in the governance of banks.

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