Why Do Bank Boards Have Risk Committees?

Rene M. Stulz, James G. Tompkins, Rohan Williamson and Zhongxia Shelly Ye
Additional contact information
Rene M. Stulz: Ohio State University and European Corporate Governance Institute
James G. Tompkins: Kennesaw State University
Rohan Williamson: Georgetown University
Zhongxia Shelly Ye: University of Texas at San Antonio

Working Paper Series from Ohio State University, Charles A. Dice Center for Research in Financial Economics

Abstract: We develop a theory of bank board risk committees. With this theory, such committees are valuable even though there is no expectation that bank risk is lower if the bank has a well-functioning risk committee. As predicted by our theory (1) many large and complex banks voluntarily chose to have a risk committee before the Dodd-Frank Act forced bank holding companies with assets in excess of $10 billion to have a board risk committee, and (2) establishing a board risk committee does not reduce a bank’s risk on average. Using unique interview data, we show that the work of risk committees is consistent with our theory in part.

JEL-codes: G21 G28 G34 (search for similar items in EconPapers)
Date: 2021-07
New Economics Papers: this item is included in nep-rmg
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://dx.doi.org/10.2139/ssrn.3893882

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ecl:ohidic:2021-12

Access Statistics for this paper

More papers in Working Paper Series from Ohio State University, Charles A. Dice Center for Research in Financial Economics Contact information at EDIRC.
Bibliographic data for series maintained by ().