Board Conduct in Banks

We examine private and confidential minutes of board meetings of a majority of Indian banks, and offer insights into the issues tabled and discussed in bank boards. We find that risk issues account for only 10% of the issues tabled with regulation and compliance accounting for the most (41%) followed by business strategy (31%). Only 18% of the issues are deliberated in detail. Examining the minutes of risk management committee meetings, we find that only 31% of the issues tabled are forward-looking. Using a simple model, we infer that bank boards under-invest in risk and over-invest in regulation and compliance.

Keywords: Banks, Bank Failure, Board of directors, Board minutes, Corporate governance,

JEL Classification: G30, L20

Suggested Citation: Suggested Citation

Agarwal, Samanvaya and Kamath, Saipriya and Subramanian, Krishnamurthy and Tantri, Prasanna L., Board Conduct in Banks (April 9, 2021). Available at SSRN: https://ssrn.com/abstract=3822953 or http://dx.doi.org/10.2139/ssrn.3822953