Using a sample of 50 largest Chinese banks during the period of 2003-2010, we explore a comprehensive set of board characteristics (size, composition and functioning of the board) and analyze their impacts on bank performance and bank asset quality in China. We find that the number of board meetings and the proportion of independent directors have significantly positive impacts on both bank performance and asset quality while bank size has a significantly negative impact on bank performance. We find new evidence that the degree of bank boards’ political connection is negatively correlated with bank performance and asset quality. The findings suggest that the board of directors plays a significant role in bank governance in China.

Board Characteristics and Chinese Bank Performance

This paper seeks to review the theoretical and empirical literature on the relationship between bank governance and performance, providing a comprehensive understanding of the existing research and offering guidance for investors and regulators on the major points of consensus and disagreement among researchers on this issue Although the question of what determines the levels of firms’ performance, with special emphasis on the role of the corporate governance, has long been the subject of substantial academic research, it gained increased attention in the banking industry in the last decade due to a series of financial scandals and, more recently, to the global financial crisis In fact, in the wake of the 2007–2008 financial crisis, bank corporate governance mechanisms received heightened attention, accompanied by the renewed interest in the degree of effectiveness of such mechanisms, and their impact on performance Given the vast number of influences on corporate performance, such as the numerous characteristics of the board of directors, there is an abundant literature on the determinants of performance Thus, this paper tries to bring together this diverse body of knowledge into a coherent whole Banks have unique attributes that interfere with the way in which the usual corporate governance mechanisms work Thus, the main differences between banks and non-financial firms, which justify that some of the regularities found in the literature on the relationship between a set of corporate governance mechanisms and performance do not hold for banks, are also analysed Then, we extensively review the literature on the board of directors and its impact on performance in the financial crisis and non-financial crisis periods Finally, we also survey the (very) scarce research on the relationship between board characteristics and bank failures

/pdf/bank-governance-and-performance-a-survey-of-the-literature-2yqh8srhr3.pdf

Bank governance and performance: a survey of the literature

Board governance and bank performance: A meta- analysis

This study investigates the effect of corporate governance on banks' performance in Egypt. It tests the relationship between bank performance and selected factors of corporate governance mechanisms, namely the board size, non-executive directors, CEO duality, board female, board qualifications, and the block holders. Return on assets and return on equity are used as proxy for bank performance. The control variables used in this study are bank size, capital adequacy ratio, debt ratio, the real GDP growth, crisis and revolution. The study used financial data of 25 Egyptian banks covering a period from 2006 to 2014. I used Generalised Least Square (GLS) Random-Effects models to investigate for this relation to find that board size, CEO duality, capital adequacy ratio and bank size are positively affect the bank performance. Revolution has a significant negative correlation with ROA, indicating that Egyptian banks suffered significantly during the revolution period especially the local banks. Non-executive directors, women presentation, board qualifications, and the block ownership have no effect on bank performance. Despite Egyptian banks still have poor corporate governance compared to banks of developing countries, especially in transparency and disclosure; the empirical findings suggest that governance has an essential role in deciding the Egyptian banks' performance.

https://archive.aessweb.com/index.php/5002/article/download/1647/2410

Corporate Governance and Banks Performance: Evidence from Egypt

The Chinese banking system is critical to the functioning of the Chinese economy, being the main conduit through which savings are allocated to investment opportunities. Banking activity in China has grown rapidly over the past decade in association with the expansion of the Chinese economy, and the Chinese banking system now includes some of the world’s largest banks. Chinese banks have become more commercially orientated over this period, although the Chinese Government retains considerable influence over their activities. This article examines the size and structure of the Chinese banking system and the key characteristics of banking activity in China. The regulatory and institutional arrangements for banking in China are also outlined.

the Chinese Banking system

As part of its banking reform, China is standardizing the practice of boards of directors and giving a full play to their decision-making and board oversight function. This paper helps to predict the effect of such effort by examining the relation between board governance structure and performance of Chinese banks for the period of 1998-2007. We find that Western governance mechanisms within the principal-agent framework work effectively in Chinese banks. Boards with stronger governance structure produce superior financial performance in Chinese banks. Specifically, higher board ownership, lower percentage of insiders on board, and lower block ownership are associated with better bank performance. These findings suggest that strengthening board governance and introducing global best practices and accountability will likely improve Chinese bank performance significantly and it is the right direction to take as China’s banking reform deepens.

https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1750564_code245819.pdf?abstractid=1368962&rulid=5314495&mirid=2

Board Governance and Performance of Chinese Banks

Board governance and performance of Chinese banks

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Board Governance and Performance of Chinese Banks

Board governance and performance of Chinese banks