Board of directors characteristics affect commercial banks’ performance – evidence in Vietnam

Nguyen Kim Quoc Trung

Cogent Business & Management, 2022, vol. 9, issue 1, 2060164

Abstract: This study aims to identify the board of directors’ characteristics affecting commercial banks’ performance in Vietnam. The paper is based on the data collected over eleven years (2010–2020) for a set of 35 Vietnamese commercial banks listed on the stock market. The author explores the board of director characteristics affecting banks’ performance in Vietnam on the platform of the quantitative regression method-System Generalised Method of Moments. The paper concludes that the statistically significant factors that involve the BOD’s characteristics affect banks’ performance, namely board size, nationality diversity and board of directors’ advanced education. The author also demonstrates the influence of ownership structures on those banks’ performances. The results reveal that banks are owned and controlled by the government, and ownership concentration can improve and increase their performance. The author clarifies the role of the ownership concentration factor in the relationship to a bank’s performance. Significantly, commercial banks, which have their shareholders own over 5% of shares, namely institutions, the government, and members of the board of directors, can improve their performance because these shareholders have strict mechanisms to monitor and control the bank’s activities to minimize risks and increase the commercial bank’s performance.

Date: 2022
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DOI: 10.1080/23311975.2022.2060164

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