Mollah, S., Liljeblom, E. and Mobarek, A. (2021) Heterogeneity in independent non-executive directors' attributes and risk-taking in large banks. Journal of Corporate Finance, 70. 102074. ISSN 0929-1199
Abstract
The extant literature suggests that complex firms can benefit from independent non-executive director (INED) quality. To address the issue of INED quality, we look at heterogeneity in the independent non-executive directors' (INEDs') attributes and explore whether this is related to risk-taking behaviour in large banks. We gather novel, hand-collected, director-level data for approximately 2400 independent non-executive directors (INEDs) of 185 global large banks from 35 countries for the period of 2004–2016, concluding that heterogeneity in INEDs' gender, financial expertise, and board tenure all influence risk-taking behaviour. Employing several identification strategies, we show that the cause seems to be heterogeneity in the INEDs' attributes, as channelled through information asymmetry. We also find that heterogeneity in the INEDs' attributes significantly mitigates bank risk-taking in the post-2009 period. Our study contributes to the literature on both the benefits of INEDs and director heterogeneity.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2021 Elsevier B.V. This is an author produced version of a paper subsequently published in Journal of Corporate Finance. Uploaded in accordance with the publisher's self-archiving policy. Article available under the terms of the CC-BY-NC-ND licence (https://creativecommons.org/licenses/by-nc-nd/4.0/). |
Keywords: | Independent non-executive director (INED); Attributes heterogeneity; Risk-taking; Large banks |
Dates: |
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Institution: | The University of Sheffield |
Academic Units: | The University of Sheffield > Faculty of Social Sciences (Sheffield) > Management School (Sheffield) |
Depositing User: | Symplectic Sheffield |
Date Deposited: | 27 Aug 2021 09:38 |
Last Modified: | 19 Feb 2023 01:13 |
Status: | Published |
Publisher: | Elsevier |
Refereed: | Yes |
Identification Number: | 10.1016/j.jcorpfin.2021.102074 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:177527 |
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Filename: Mollah-Liljeblom-Mobarek-JCF2021-Forthcoming.pdf
Licence: CC-BY-NC-ND 4.0