Board Structure, CEO Turnover, and Bank Performance

Chen, Zhongdong

doi:10.2139/ssrn.1787331

Abstract

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Board Structure, CEO Turnover, and Bank Performance

Zhongdong Chen

University of Tennessee, Knoxville

April 1, 2011

Abstract:
This study systematically investigates the impact of board structure on forced bank CEO turnovers. Using a sample of 149 bank CEO turnovers, I show that forced CEO turnover is motivated more by high risk level than by poor performance, suggesting that bank directors place “safety and soundness” before profitability. This study is the first to document that occupational background of independent directors can have a significant impact on forced bank CEO turnovers. In contrast with previous studies, I do not find any significant correlation between board independence ratio and the probability of forced bank CEO turnover, or changes in post-turnover performance.

Number of Pages in PDF File: 58

Keywords: corporate governance, board structure, banking industry, CEO turnover, successor origin

JEL Classification: G21, G34, G38

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Date posted: March 18, 2011 ; Last revised: August 15, 2011

Suggested Citation

Chen, Zhongdong, Board Structure, CEO Turnover, and Bank Performance (April 1, 2011). Available at SSRN: http://ssrn.com/abstract=1787331 or http://dx.doi.org/10.2139/ssrn.1787331

Contact Information

Zhongdong Chen (Contact Author)

University of Tennessee, Knoxville ( email )

Knoxville, TN 37996
United States