Bankers on the Board and CEO Turnover

52 Pages Posted: 5 Dec 2019 Last revised: 24 Dec 2019

See all articles by Jen Chang

Jen Chang

SKKU Business School

Min Jung Kang

University of Michigan at Flint - School of Management

Y. Han (Andy) Kim

Sungkyunkwan University

Date Written: November 19, 2019

Abstract

Governance literature finds that the independent directors from the lending banks (CBDs) bring both financial expertise and conflict of interest between shareholders and debtholder. We examine how the presence of CBDs affects the implicit incentive of CEO turnover. Using BoardEx and DealScan data, we hypothesize and find that CBDs make the CEO turnover more sensitive to both performance and risk. Post CEO turnover analysis reveals that firm performance improves and risk decreases in the presence of CBDs.

Keywords: CEO turnover, banker directors, board of directors, commercial bankers, corporate governance, implicit incentive

JEL Classification: G3

Suggested Citation

Chang, Jeung-Yoon (Jen) and Kang, Min Jung and Kim, Y. Han (Andy), Bankers on the Board and CEO Turnover (November 19, 2019). Available at SSRN: https://ssrn.com/abstract=3489578 or http://dx.doi.org/10.2139/ssrn.3489578

Jeung-Yoon (Jen) Chang

SKKU Business School ( email )

Korea, Republic of (South Korea)

Min Jung Kang (Contact Author)

University of Michigan at Flint - School of Management ( email )

303 E. Kearsley Street
Flint, MI 48502
United States

Y. Han (Andy) Kim

Sungkyunkwan University ( email )

422 School of Business
25-2 SungKyunKwan-Ro, Jongno-ju
Seoul, 110-745
Korea, Republic of (South Korea)
+82-2-760-0622 (Phone)
+82-2-760-0622 (Fax)

HOME PAGE: http://https://sites.google.com/site/andyyhankim/

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