The Impact of Board Composition and Activity on Non-Performing Loans

Authors

Md Nurul Islam, Eastern Illinois University

Files

Description

This paper examines the impact of board composition and activity on bank non-performing loans (NPLs). The empirical evidence suggests that NPLs are negatively related to board independence, separation between the CEO and chairman roles, directors with financial expertise, and the frequency of committee meetings. Additionally, we find that, during the financial crisis period (2008–2009), a large board size and the presence of female directors may also help lower NPLs. The results support the hypothesis that shareholder-friendly bank boards and active boards are more effective monitors, and thus help lower bank’s NPLs.

Publication Date

4-13-2020

Creative Commons License

This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.

Keywords

Bank governance, non-performing loans, bank riskiness, board composition, board activity, financial expertise, financial crisis

Disciplines

Business

Comments

Graduate division, third place

Recommended Citation

Islam, Md Nurul, "The Impact of Board Composition and Activity on Non-Performing Loans" (2020). 2020 Awards for Excellence in Student Research and Creative Activity. 7.
https://thekeep.eiu.edu/lib_awards_2020_docs/7