EconPapers    
Economics at your fingertips  
 

Board structure and financial stability of financial firms: Do board policies and CEO duality matter?

Ali Uyar, Shaista Wasiuzzaman, Cemil Kuzey and Abdullah S. Karaman

Journal of International Accounting, Auditing and Taxation, 2022, vol. 47, issue C

Abstract: As the financial sector plays a central role in the economic development of the countries, its proper functioning is also important for other sectors. This study tests whether female and independent directors ensure financial stability in the financial firms with the moderating effect of board policies and duality where the Chief Executive Officer (CEO) also chairs the board of directors. The results reveal that while board gender diversity ensures financial stability in the full sample of financial firms and the sub-samples of Banking, Insurance, and Residential and Commercial Real Estate Investment Trusts (REITs), it does not in Investment Banking and Real Estate firms. Moreover, the findings confirm that board independence improves financial stability only in the Investment Banking sub-sector. It is noteworthy that our main results, but not the robustness tests, find that independent directors actually reduce financial stability in the Banking sub-sector. It should be noted that our findings are sometimes contingent upon the analyzed sub-sector, a country’s legal system and enforcement mechanisms, and whether the primary domicile of a company is in the European Union. Moderation analyses show that depending on the sub-sector, board policies and CEO duality have a very limited role in strengthening the directors’ monitoring function and ensuring financial stability. For five sub-sectors, far-reaching implications considering contingencies are suggested in the conclusion section.

Keywords: Financial firms; Financial stability; Board structure; Board diversity; Board independence; CEO duality (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1061951822000295
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jiaata:v:47:y:2022:i:c:s1061951822000295

DOI: 10.1016/j.intaccaudtax.2022.100474

Access Statistics for this article

Journal of International Accounting, Auditing and Taxation is currently edited by R. Larson

More articles in Journal of International Accounting, Auditing and Taxation from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

 
Page updated 2022-11-12
Handle: RePEc:eee:jiaata:v:47:y:2022:i:c:s1061951822000295