Impact of board of directors on insolvency risk: which role of the corruption control? Evidence from OECD banks

Marwa Sallemi, Salah Ben Hamad and Nejla Ould Daoud Ellili ()
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Marwa Sallemi: Higher Institute of Management of Gabes
Salah Ben Hamad: University of Economics and Management of Tunis
Nejla Ould Daoud Ellili: Abu Dhabi University

Review of Managerial Science, 2023, vol. 17, issue 8, No 7, 2868 pages

Abstract: Abstract This study examines the relationship between corporate governance and banking stability by considering the moderating role of corruption controls. This study applies the Generalized Moments Method using a sample of panel data collected from 74 banks in 10 Organization for Economic Co-operation and Development countries during the period 2006–2016. The empirical results reveal that banking governance is positively associated with banking stability as measured by the Z-score. Additionally, the findings indicate that effective corruption control significantly moderates the power of the board of directors in boosting banking stability. This study discerns the fundamental role of the board of directors as the main corporate governance mechanism and internal player in the stability of banking institutions.

Keywords: Board of directors; Corruption control index (CCI); Corporate governance; Z-score; OECD banks (search for similar items in EconPapers)
JEL-codes: C33 G20 G30 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s11846-022-00605-w

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