Board governance, diversity and efficiency: evidence from ASEAN-5 commercial banks

Board governance, diversity and efficiency: evidence from ASEAN-5 commercial banks

The role of sound corporate governance in the banking industry is exacerbated following the disastrous effects of the Asian Financial Crisis and the Global Financial Crisis in in 1998 and 2008 respectively. A common theme to the crises was the tendency of banks to engage in risky business such as of...

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Main Authors: Ramly, Zulkufly, Chan, Sok Gee, Sapiei, Noor Sharoja, Mustapha, Mohd Zulkhairi
Format: Conference or Workshop Item
Language:English
Published: UUM College of Law, Government and International Studies Universiti Utara Malaysia 2014
Subjects:
HG1501 Banking
Online Access:http://irep.iium.edu.my/39930/
http://irep.iium.edu.my/39930/5/BOARD_GOVERNANCE.pdf
id iium-39930
recordtype eprints
spelling iium-399302016-09-20T07:03:05Z http://irep.iium.edu.my/39930/ Board governance, diversity and efficiency: evidence from ASEAN-5 commercial banks Ramly, Zulkufly Chan, Sok Gee Sapiei, Noor Sharoja Mustapha, Mohd Zulkhairi HG1501 Banking The role of sound corporate governance in the banking industry is exacerbated following the disastrous effects of the Asian Financial Crisis and the Global Financial Crisis in in 1998 and 2008 respectively. A common theme to the crises was the tendency of banks to engage in risky business such as off-balance sheet and imprudent lending activities, which contributed to the failure in resource allocation and of the payment system. A key aspect of corporate governance is the effectiveness of the board of directors to steer commercial banks to greater accountability and ultimately enhancing performance. This study examines the effect of board governance and diversity on the efficiency of commercial banks in Malaysia, Indonesia, Thailand, Singapore and the Philippines or ASEAN-5. Using unbalanced panel data from 1998 to 2012, the results of Generalized Least Squares regression show that board size, ratio of independent directors and board diversity variables have positive effect on bank efficiency. However, the net effect of one board governance mechanism is more likely to be contingent on the level of corporate outcome that it is expected to influence. High efficiency banks seem to benefit from a larger board size, higher ratio of independent directors and board diversity. This study provides supporting evidence for the results of prior studies that showed that the effects of board size and board independence vary and is more likely to be contingent on the level of corporate outcome that it is expected to influence. UUM College of Law, Government and International Studies Universiti Utara Malaysia 2014 Conference or Workshop Item PeerReviewed application/pdf en http://irep.iium.edu.my/39930/5/BOARD_GOVERNANCE.pdf Ramly, Zulkufly and Chan, Sok Gee and Sapiei, Noor Sharoja and Mustapha, Mohd Zulkhairi (2014) Board governance, diversity and efficiency: evidence from ASEAN-5 commercial banks. In: The UUM International Conference on Governance 2014 (ICG 2014), 29th-30th Nov. 2014, Famingo Hotel by the Beach, Penang, Malaysia.
repository_type Digital Repository
institution_category Local University
institution International Islamic University Malaysia
building IIUM Repository
collection Online Access
language English
topic HG1501 Banking
spellingShingle HG1501 Banking
Ramly, Zulkufly
Chan, Sok Gee
Sapiei, Noor Sharoja
Mustapha, Mohd Zulkhairi
Board governance, diversity and efficiency: evidence from ASEAN-5 commercial banks
description The role of sound corporate governance in the banking industry is exacerbated following the disastrous effects of the Asian Financial Crisis and the Global Financial Crisis in in 1998 and 2008 respectively. A common theme to the crises was the tendency of banks to engage in risky business such as off-balance sheet and imprudent lending activities, which contributed to the failure in resource allocation and of the payment system. A key aspect of corporate governance is the effectiveness of the board of directors to steer commercial banks to greater accountability and ultimately enhancing performance. This study examines the effect of board governance and diversity on the efficiency of commercial banks in Malaysia, Indonesia, Thailand, Singapore and the Philippines or ASEAN-5. Using unbalanced panel data from 1998 to 2012, the results of Generalized Least Squares regression show that board size, ratio of independent directors and board diversity variables have positive effect on bank efficiency. However, the net effect of one board governance mechanism is more likely to be contingent on the level of corporate outcome that it is expected to influence. High efficiency banks seem to benefit from a larger board size, higher ratio of independent directors and board diversity. This study provides supporting evidence for the results of prior studies that showed that the effects of board size and board independence vary and is more likely to be contingent on the level of corporate outcome that it is expected to influence.
format Conference or Workshop Item
author Ramly, Zulkufly
Chan, Sok Gee
Sapiei, Noor Sharoja
Mustapha, Mohd Zulkhairi
author_facet Ramly, Zulkufly
Chan, Sok Gee
Sapiei, Noor Sharoja
Mustapha, Mohd Zulkhairi
author_sort Ramly, Zulkufly
title Board governance, diversity and efficiency: evidence from ASEAN-5 commercial banks
title_short Board governance, diversity and efficiency: evidence from ASEAN-5 commercial banks
title_full Board governance, diversity and efficiency: evidence from ASEAN-5 commercial banks
title_fullStr Board governance, diversity and efficiency: evidence from ASEAN-5 commercial banks
title_full_unstemmed Board governance, diversity and efficiency: evidence from ASEAN-5 commercial banks
title_sort board governance, diversity and efficiency: evidence from asean-5 commercial banks
publisher UUM College of Law, Government and International Studies Universiti Utara Malaysia
publishDate 2014
url http://irep.iium.edu.my/39930/
http://irep.iium.edu.my/39930/5/BOARD_GOVERNANCE.pdf
first_indexed 2023-09-18T20:57:20Z
last_indexed 2023-09-18T20:57:20Z
_version_ 1777410391966482432

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