Purpose The purpose of this paper is to examine the performance implications of board size, composition and frequency of board meetings on the performance of banks. Design/methodology/approach The performance of banks is assessed on various parameters such as return on assets (ROA), Tobin’s Q, non-performing asset ratio (NPA ratio) and the net write-off ratio (NWO ratio). The effects of changes in board size and composition and frequency of meetings on the performance of banks are investigated using feasible generalized least square (FGLS) estimation of panel data covering a time span of five years concerning 40 banks incorporated in India. Frequency of board meetings is taken as a proxy for board activity and involvement. The authors have also tested for endogeneity issues in the model. Findings A curvilinear relationship was found between the board size and performance of banks. The authors have modelled a cubic form of the relationship for Indian banks. The authors’ findings indicate that an increase in board size is associated with better bank performance within both low and high board size ranges. Alternatively, increased board size is negatively associated with bank performance in the intermediate board size range. The study did not find any significant relationship between performance and frequency of board meetings and board composition. Research limitations/implications The behavioural variables reflecting the involvement of the board have not been incorporated in the model to determine the impact of board involvement on the performance of banks owing to the availability of data. It is hoped that this paper will be useful for major regulatory bodies such as the Ministry of Corporate Affairs (MCA), Securities and Exchange Board of India (SEBI), Company Law Board (CLB) and stock exchanges in India and other emerging economies in devising listing norms and other governance-related aspects. Originality/value Non-linear relationships between the board size and performance are not normally prevalent in emerging economies, especially in the banking sector. However, such a relationship exists among the Indian banks. This paper is the first of its kind to identify and address the same.

Deterioration in post IPO operating performance is a well-established fact in financial economics literature. The current article extends this discussion by exploring the relationship between post IPO performance deterioration and underpricing. Level of underpricing is used as a proxy for signalling. The analysis was done by dividing the whole sample into two groups: low underpricing group and high underpricing group and then examining the trend in post IPO performance deterioration for both the groups. The expectation was that the group with low underpricing would show more deterioration in performance than group with high underpricing. Study found that overall performance of firms deteriorated for both the groups but the difference in trend was not found to be significantly different and hence the difference in change in performance for both the group cannot be attributed to underpricing. Our results supported the results obtained by Jain and Kini ( 1994 ), Jegadeesh, Weinstein and Welch ( 1993 ) and Garfinkel ( 1993 ). However, like Jain and Kini ( 1994 ) we also do not conclude against signalling model.

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During the past two decades, numerous Indian firms have gone public by undertaking Initial Public Offerings (IPOs) of their equity shares. Yet, many other Indian firms have intentionally chosen to remain private even though they fulfill the eligibility criteria of going public. This raises the question as to what are the determinants of firms' going-public decision. While researchers have propounded several theories to explain the firms� going-public decision, yet the empirical studies conducted to test the proposed theories are still scarce, mainly due to lack of data on privately held firms necessary for a direct investigation of the choice between going public and remaining private. None of the existing studies have assessed the determinants of Indian firms' going-public decision. Besides, no consistent stylized facts have so far emerged. Rather contradictory findings have been reported in some of the existing studies. Further these individual studies have not been comprehensive as each of them has focused only on a limited number of determinants. This study investigates the determinants of going-public decision of the Indian firms, juxtaposing the following two related research issues: What ex-ante (pre-IPO) characteristics of going-public Indian firms differentiate them from those Indian firms that continue to remain private even though they fulfill the eligibility criteria of going public? What ex-post consequences of IPOs on firm characteristics influence their goingpublic decision? The preceding research issues are examined using two independent analyses. First, a panel probit regression analysis is done to identify the ex-ante characteristics of going- public Indian firms that differentiate them from those Indian firms that continue to remain private even though they fulfill the eligibility criteria of going public. This analysis reveals that going-public Indian firms tend to be younger, riskier, transparent, more profitable, experiencing higher sales growth, and larger-sized than firms that decide to remain private. Also if a firm belongs to retail trade sectors, it increases its probability to go public. In the second analysis, ex-post consequences of IPOs on firm characteristics are examined by comparing pre-IPO characteristics of IPO firms with their post-IPO characteristics using Wilcoxon two-sample signed rank test. This analysis suggests that Indian firms go public to: finance their growth and investments diversify owners' risk rebalance their capital structure bring down their borrowing rates.

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