There is argument that the main reason behind the corporate failure is the engagement of banks in excessive risk taking. However, the existence literature provides conflicting evidence in this concern. The main objectives of this study is to investigate the influence of board characteristics on bank risk taking, by using Pooled Ordinary Least Squares regression techniques to test a sample of 27 Egyptian banks covering the period from 2006 to 2011. Measures of bank risk employed are the insolvency risk, credit risk and liquidity risk. The explanatory variables of board characteristics are board size, non-executive directors, CEO duality, female presence and, board qualifications. The control variables are bank size, debt ratio, and crisis. The results show that Board size is positively significant with the three measures of risks. Non-executive directors are negatively significant correlated with both insolvency and liquidity risk. CEO’s duality is found positively significant with credit risk. Board female is negatively significant with insolvency and liquidity risk, while it is positively significant with credit risk. Board qualifications have no effect on the three measures of risks. The findings support the idea that board of director's characteristics is a determinant factor for bank risk taking.
| Published in | Journal of Finance and Accounting (Volume 5, Issue 1) |
| DOI | 10.11648/j.jfa.20170501.13 |
| Page(s) | 24-33 |
| Creative Commons |
This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited. |
| Copyright |
Copyright © The Author(s), 2024. Published by Science Publishing Group |
Board Characteristics, Bank Risk Taking, Insolvency Risk, Credit Risk, Liquidity Risk, and Egypt
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APA Style
Mohamed Galal Abobakr, Khairy Elgiziry. (2017). The Relationship Between Board of Directors’ Characteristics and Bank Risk-Taking: Evidence from Egyptian Banking Sector. Journal of Finance and Accounting, 5(1), 24-33. https://doi.org/10.11648/j.jfa.20170501.13
ACS Style
Mohamed Galal Abobakr; Khairy Elgiziry. The Relationship Between Board of Directors’ Characteristics and Bank Risk-Taking: Evidence from Egyptian Banking Sector. J. Finance Account. 2017, 5(1), 24-33. doi: 10.11648/j.jfa.20170501.13
AMA Style
Mohamed Galal Abobakr, Khairy Elgiziry. The Relationship Between Board of Directors’ Characteristics and Bank Risk-Taking: Evidence from Egyptian Banking Sector. J Finance Account. 2017;5(1):24-33. doi: 10.11648/j.jfa.20170501.13
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Download@article{10.11648/j.jfa.20170501.13,
author = {Mohamed Galal Abobakr and Khairy Elgiziry},
title = {The Relationship Between Board of Directors’ Characteristics and Bank Risk-Taking: Evidence from Egyptian Banking Sector},
journal = {Journal of Finance and Accounting},
volume = {5},
number = {1},
pages = {24-33},
doi = {10.11648/j.jfa.20170501.13},
url = {https://doi.org/10.11648/j.jfa.20170501.13},
eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jfa.20170501.13},
abstract = {There is argument that the main reason behind the corporate failure is the engagement of banks in excessive risk taking. However, the existence literature provides conflicting evidence in this concern. The main objectives of this study is to investigate the influence of board characteristics on bank risk taking, by using Pooled Ordinary Least Squares regression techniques to test a sample of 27 Egyptian banks covering the period from 2006 to 2011. Measures of bank risk employed are the insolvency risk, credit risk and liquidity risk. The explanatory variables of board characteristics are board size, non-executive directors, CEO duality, female presence and, board qualifications. The control variables are bank size, debt ratio, and crisis. The results show that Board size is positively significant with the three measures of risks. Non-executive directors are negatively significant correlated with both insolvency and liquidity risk. CEO’s duality is found positively significant with credit risk. Board female is negatively significant with insolvency and liquidity risk, while it is positively significant with credit risk. Board qualifications have no effect on the three measures of risks. The findings support the idea that board of director's characteristics is a determinant factor for bank risk taking.},
year = {2017}
}
TY - JOUR T1 - The Relationship Between Board of Directors’ Characteristics and Bank Risk-Taking: Evidence from Egyptian Banking Sector AU - Mohamed Galal Abobakr AU - Khairy Elgiziry Y1 - 2017/01/24 PY - 2017 N1 - https://doi.org/10.11648/j.jfa.20170501.13 DO - 10.11648/j.jfa.20170501.13 T2 - Journal of Finance and Accounting JF - Journal of Finance and Accounting JO - Journal of Finance and Accounting SP - 24 EP - 33 PB - Science Publishing Group SN - 2330-7323 UR - https://doi.org/10.11648/j.jfa.20170501.13 AB - There is argument that the main reason behind the corporate failure is the engagement of banks in excessive risk taking. However, the existence literature provides conflicting evidence in this concern. The main objectives of this study is to investigate the influence of board characteristics on bank risk taking, by using Pooled Ordinary Least Squares regression techniques to test a sample of 27 Egyptian banks covering the period from 2006 to 2011. Measures of bank risk employed are the insolvency risk, credit risk and liquidity risk. The explanatory variables of board characteristics are board size, non-executive directors, CEO duality, female presence and, board qualifications. The control variables are bank size, debt ratio, and crisis. The results show that Board size is positively significant with the three measures of risks. Non-executive directors are negatively significant correlated with both insolvency and liquidity risk. CEO’s duality is found positively significant with credit risk. Board female is negatively significant with insolvency and liquidity risk, while it is positively significant with credit risk. Board qualifications have no effect on the three measures of risks. The findings support the idea that board of director's characteristics is a determinant factor for bank risk taking. VL - 5 IS - 1 ER -
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