Conventional wisdom leads to assert that good governance may underpin bank performance while bad governance destroys stability and soundness. We run a factor analysis to synthesize 23 bank board characteristics of the Eurostoxx banks into seven key features: independence, size, dedication, tenure, corporate governance quality, external perspective, competence, and diversity. We then use multiple regression and find that independence and board and committees size are the most relevant characteristics for banks risk-taking and in line with the agency theory, our results show that independence increases the solvency of banks, and size reduces it.

Better safe than sorry. Bank corporate governance, risk-taking, and performance / Brogi, M.; Lagasio, V.. - In: FINANCE RESEARCH LETTERS. - ISSN 1544-6123. - (2021), p. 102039. [10.1016/j.frl.2021.102039]

Better safe than sorry. Bank corporate governance, risk-taking, and performance

Brogi M.;Lagasio V.
2021

Abstract

Conventional wisdom leads to assert that good governance may underpin bank performance while bad governance destroys stability and soundness. We run a factor analysis to synthesize 23 bank board characteristics of the Eurostoxx banks into seven key features: independence, size, dedication, tenure, corporate governance quality, external perspective, competence, and diversity. We then use multiple regression and find that independence and board and committees size are the most relevant characteristics for banks risk-taking and in line with the agency theory, our results show that independence increases the solvency of banks, and size reduces it.
Banks; Corporate governance; Factor analysis; Performance; Regulation; Risk-taking
01 Pubblicazione su rivista::01a Articolo in rivista
Better safe than sorry. Bank corporate governance, risk-taking, and performance / Brogi, M.; Lagasio, V.. - In: FINANCE RESEARCH LETTERS. - ISSN 1544-6123. - (2021), p. 102039. [10.1016/j.frl.2021.102039]
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11573/1549039
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