 Do financial experts on audit committees matter for bank insolvency risk-taking? The monitoring role of bank regulation and ethical policyIsabel-María García-Sánchez, Emma García-Meca and Beatriz Cuadrado-Ballesteros Journal of Business Research, 2017, vol. 76, issue C, 52-66 Abstract: This paper analyses the relationship between the presence of financial experts on audit committees and the levels of insolvency risk in the banking sector. The main contribution is the introduction of banking sector regulation and ethical policies as moderators of this relationship. By using a sample of 159 banks from different countries for the period 2004–2010, empirical results suggest that the presence of financial experts on audit committees is useful to reduce insolvency risk, supporting the monitoring advantage hypothesis of financial expertise. This relationship is stronger when banking sector regulation is weaker and also in banks with stronger policies against unethical practices. These findings suggest that financial expertise substitutes regulation and complements ethical policies in reducing insolvency risk. Keywords: Banking sector; Banking regulation; Banking risk; Insolvency; Ethical policies (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:76:y:2017:i:c:p:52-66 DOI: 10.1016/j.jbusres.2017.03.004 Access Statistics for this article Journal of Business Research is currently edited by A. G. Woodside More articles in Journal of Business Research from Elsevier |
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