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Strong Boards, CEO Power and Bank Risk-Taking


Shams Pathan


University of Queensland - Business School; The University of Queensland
February 1, 2009

Journal of Banking and Finance, Vol. 33, No. 7, pp. 1340-1350

Abstract:     
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 (1,534 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.

Number of Pages in PDF File: 31

Keywords: Bank risk-taking, Board of directors, CEO power, Bank governance, Bank holding companies

JEL Classification: G21, G28, G30, G32, G38

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Date posted: February 2, 2009 ; Last revised: May 13, 2009

Suggested Citation

Pathan, Shams, Strong Boards, CEO Power and Bank Risk-Taking (February 1, 2009). Journal of Banking and Finance, Vol. 33, No. 7, pp. 1340-1350. Available at SSRN: http://ssrn.com/abstract=1336309

Contact Information

Shams Pathan (Contact Author)
University of Queensland - Business School ( email )
The University of Queensland
Brisbane, Queensland 4072
Australia
61 7 3346 8075 (Phone)
61 7 3346 8166 (Fax)
HOME PAGE: http://works.bepress.com/shams_pathan/
The University of Queensland ( email )
C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia
HOME PAGE: http://www.business.uq.edu.au/staff/staff_details?name=spathan&action=show_all

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