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Better safe than sorry. Bank corporate governance, risk-taking, and performance

Marina Brogi and Valentina Lagasio ()

Finance Research Letters, 2022, vol. 44, issue C

Abstract: Conventional wisdom leads to assert that good governance may underpin bank performance while bad governance destroys stability and soundness. We run a factor analysis to synthesize 23 bank board characteristics of the Eurostoxx banks into seven key features: independence, size, dedication, tenure, corporate governance quality, external perspective, competence, and diversity. We then use multiple regression and find that independence and board and committees size are the most relevant characteristics for banks risk-taking and in line with the agency theory, our results show that independence increases the solvency of banks, and size reduces it.

Keywords: Corporate governance; Banks; Regulation; Risk-taking; Performance; Factor analysis (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:44:y:2022:i:c:s1544612321001203

DOI: 10.1016/j.frl.2021.102039

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