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The effect of CEO power on bank risk: Do boards and institutional investors matter?✰

Yener Altunbas (), John Thornton () and Yurtsev Uymaz

Finance Research Letters, 2020, vol. 33, issue C

Abstract: We test for a link between CEO power and risk taking in US banks. Banks are more likely to take risks if they have powerful CEOs and relatively poor balance sheets. There is little evidence that executive board size and independence have a dampening effect on the channels through which powerful CEOs influence risk-taking and some evidence that institutional investors reinforce the risk-taking preferences of powerful CEOs.

Keywords: Banks; Governance; Risk; CEO power; Boards of directors; Institutional investors (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:33:y:2020:i:c:s1544612319300674

DOI: 10.1016/j.frl.2019.05.020

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