Sitting on the Fence: Does Having a ‘Dual-Director’ Add to Bank Profitability?

23 Pages Posted: 15 Aug 2013

See all articles by Polina Savchenko

Polina Savchenko

National Research University Higher School of Economics - International Center for the Study of Institutions and Development

Maria Semenova

National Research University Higher School of Economics

Date Written: August 14, 2013

Abstract

This paper investigates how combining positions between the board of directors and top-management affects bank profitability. We use 2010 bank-level data from 112 countries. Our results suggest that combining positions reduces both ROE and ROA of banks. However, for banks in developing countries, the influence proves to be positive. We also show that the higher the proportion of the board members who simultaneously hold a managerial position, the lower the profitability of the bank. This effect is observed both for developed and developing countries.

Keywords: corporate governance, banks, profitability

JEL Classification: G21, G34

Suggested Citation

Savchenko, Polina and Semenova, Maria, Sitting on the Fence: Does Having a ‘Dual-Director’ Add to Bank Profitability? (August 14, 2013). Higher School of Economics Research Paper No. WP BRP 16/FE/2013, Available at SSRN: https://ssrn.com/abstract=2309950 or http://dx.doi.org/10.2139/ssrn.2309950

Polina Savchenko

National Research University Higher School of Economics - International Center for the Study of Institutions and Development ( email )

Slavyanskaya ploschyad' 4/2
Moscow, RI Moscow 103074
Russia

Maria Semenova (Contact Author)

National Research University Higher School of Economics ( email )

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

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