Bank board structure and performance: Evidence for large bank holding companies

Renee Adams and Hamid Mehran

Journal of Financial Intermediation, 2012, vol. 21, issue 2, 243-267

Abstract: The subprime crisis highlights how little we know about bank governance. This paper addresses a long-standing gap in the literature by analyzing the relationship between board governance and performance using a sample of banking firm data that spans 34years. We find that board independence is not related to performance, as measured by a proxy for Tobin’s Q. However, board size is positively related to performance. Our results are not driven by M&A activity. But, we provide new evidence that increases in board size due to additions of directors with subsidiary directorships may add value as BHC complexity increases. We conclude that governance regulation should take unique features of bank governance into account.

Keywords: Corporate Governance; Board structure; Banking industry; Holding company; Complexity (search for similar items in EconPapers)
JEL-codes: G21 G34 J41 L22 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (172)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jfinin:v:21:y:2012:i:2:p:243-267

DOI: 10.1016/j.jfi.2011.09.002

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