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Bank Ownership, Board Characteristics and Performance: Evidence from Commercial Banks in India

Indira Gandhi Institute of Development Research, A.K. Vaidya Marg, Goregaon (E), Mumbai 400 065, India
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This paper was prepared as part of the National Stock Exchange of India (NSE) and the Indira Gandhi Institute of Development Research (IGIDR) Initiative on Corporate Governance. We thank Renee Adams and the participants of the NSE-IGIDR International Conference held at Mumbai, India for their helpful comments. The usual disclaimer applies.
Int. J. Financial Stud. 2018, 6(1), 17; https://doi.org/10.3390/ijfs6010017
Received: 8 June 2017 / Revised: 17 January 2018 / Accepted: 18 January 2018 / Published: 1 February 2018
We study the effect of board governance in state-owned and private banks by undertaking a study of commercial banks in India that has both bank groups. Covering a ten-year period from 2003 to 2012 that witnessed a large number of governance reforms in India, the results of our empirical analysis provide evidence of strong ownership effects with board independence exhibiting a significant positive correlation with the performance of private banks and a significant but negative correlation with the performance of state-owned banks. The effect of CEO duality is negative in state-owned banks where incidence of CEO duality is high. We find that a longer CEO tenure has significant positive effects on bank outcomes with these effects strengthening in the later years of CEO tenure. Our results have governance implications for strengthening the composition of board of directors and CEO tenure especially in state-owned banks. View Full-Text
Keywords: banks; regulation; ownership; board of directors; CEO duality; CEO tenure banks; regulation; ownership; board of directors; CEO duality; CEO tenure
MDPI and ACS Style

Sarkar, J.; Sarkar, S. Bank Ownership, Board Characteristics and Performance: Evidence from Commercial Banks in India. Int. J. Financial Stud. 2018, 6, 17.

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