Audit committee characteristics and bank performance: evidence from India

Abstract

Purpose This study aims to investigate the impact of various audit committee (AC) characteristics on the performance of Indian commercial banks. Additionally, it also analyses the non-linear relationship of AC size and AC chairman tenure with bank performance. Design/methodology/approach A panel data approach has been used in this study. The authors have used the fixed-effect estimation technique to examine the relationship between AC characteristics and bank performance during the period 2009–2010 to 2016–2017. Findings The authors find that the professional financial education of the AC chairman and members positively affects bank performance. the frequency of the AC meetings and audit chair busyness bears an inverse relationship with performance. The findings are more or less consistent across the various bank performance measures and subsamples classified based on the time period and ownership of the banks. Practical implications This study provides insights to policy regulators and policymakers who are entrusted with the establishment of ACs in the banks in light of the ongoing regulatory reforms. Originality/value The study is among one of the early studies, which study the relationship between AC characteristics and bank performance in the light of recent regulatory reforms. It also extends the existing study by considering both public and private banks operating in India.

The moderation role of board independence change in the relationship between board characteristics, related party transactions, and financial performance

“…However, it has an insignificant role in determining asset quality. Gupta and Mahakud [ 86 ] assessed the impact of chief executive officers’ personal characteristics on the performance of Indian commercial banks. The results concluded that CEO duality and professional qualification in the finance stream have a positive and significant effect on banks’ performance.…”

“…Mayur and Saravanan [ 88 ] showed no relationship between board composition and performance. Gupta and Mahakud [ 86 ] concluded that CEO duality and the professional qualification of CEOs in finance have a positive and significant effect on Indian banks’ performance.…”

Karakteristik komite audit dan kinerja bank: Komparasi syariah dan konvensional

“…Selain Indonesia telah banyak negara-negara lain yang baru-baru ini juga memfokuskan penelitian terkait dengan karakteristik yang melekat dalam kepengurusan AC diantaranya Palestina (Musallam, 2020), Bahrain (Oudat et al, 2021), Bangladesh (Fariha et al, 2021), India (Gupta & Mahakud, 2021) dan Ingris (McLaughlin et al, 2021). Kemudian, terdapat juga sebuah penelitian yang mencoba penelitian secara global serta mengkomparasikan antara bank syariah dan bank konvensional yaitu dilakukan oleh (Haddad et al, 2021).…”

“…independen maka kinerja bank akan meningka karena anggota yang independen dipercaya dapat meningkatkan efektifitas pada ssaat melakukan evaluasi dan pengawasan. ACID di IB sejalan dengan penelitian (Gupta & Mahakud, 2021) yang menyatakan bahwa anggota independen lebih baik dari pada anggota yang berafiliasi. Begitu juga dengan (Ashari & Krismiaji, 2019) serta (Haddad et al, 2021) yang beranggapan independensi AC akan mengarahkan kinerja perusahaan jauh lebih baik.…”

“…Hasil yang berbeda tersebut mungkin dikarenakan keterwakilan perempuan dalam AC pada CB lebih sedikit dibandingkan dengan IB sehingga pengaruhnya belum terlihat jelas pada peningkatan kinerja bank. Hasil ACFL IB sejalan dengan temuan (Gupta & Mahakud, 2021) yang menyatakan dengan adanya keterlibatan perempuan dalam AC dapat terus-menerus mengawasi pihak manajemen secara cermat dan teliti.…”