The Role of outside Directors in Bank Acquisitions

Subrahmanyam, Vijaya; Rangan, Nanda; Rosenstein, Stuart

doi:10.2307/3666211

Cited by 176 publications

(93 citation statements)

References 37 publications

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“…The literature on the relation between bank board size and performance suggests a significant relation (Zemzem, and Kacem, 2014). Many studies argue that large boards have positive effect on bank performance e.g., Subrahmanyam et al (1997), Andres and Vallelado (2008), and Belkhir (2009), and banking firms have larger boards than its non-bank counterparts (Booth et al, 2002). Adams and Mehran (2005) report an average board size of 18 directors (Note 1).…”

Section: Board Structure and Bank Performancementioning

confidence: 99%

Corporate Governance and Accounting Performance: A Balanced Scorecard Approach

ElBannan

2014

AFR

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This paper is motivated by the financial reform plan implemented in the Egyptian banking sector to enforce good corporate governance practices and improve performance. The study examines the association between governance quality and performance by estimating OLS regression models to test this relation. We measure governance as a multidimensional composite index comprised of board and ownership structure characteristics, while bank performance is measured using the Balanced Scorecard approach including financial and non-financial measures. Empirical evidence shows that governance has positive and significant impact on Egyptian bank performance. In particular, for the board structure, evidence shows that more executive directors on the board will enhance employee's productivity. We find that board size is an insignificant determinant for bank performance; however, small board size is a significant determinant for better customer-related performance and improved employee productivity. CEO/Chairman duality is unrelated to bank performance, financial and non-financial performance. As for ownership structure, direct foreign investment in Egyptian banks should be encouraged, as there is evidence that foreign ownership has favorable impact on bank performance especially on employee productivity. Ownership concentration adversely affects bank performance index, and has unfavorable effect on employee productivity. Finally, institutional ownership is a marginal determinant of employee productivity.

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Section: Board Structure and Bank Performancementioning

confidence: 99%

Corporate Governance and Accounting Performance: A Balanced Scorecard Approach

ElBannan

2014

AFR

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“…Consistent with Hermalin and Weisbach (1988), we restrict our analysis primarily to nonregulated industries since boards of directors for regulatory firms may be systematically different from boards of directors of non-regulatory firms (e.g., Baysinger and Zardkoohi, 1986;Subhramanyam et al, 1997). Therefore, we eliminate all financial institutions, insurance companies, and real estate firms defined as SIC codes 6000-6799.…”

Section: Sample Constructionmentioning

confidence: 99%

Additions to corporate boards: the effect of gender

Farrell¹,

Hersch²

2005

Journal of Corporate Finance

915

654

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During the decade of the 1990s the number of women serving on corporate boards increased substantially. Over this decade, we show that the likelihood of a firm adding a woman to its board in a given year is negatively affected by the number of woman already on the board. The probability of adding a woman is materially increased when a female director departs the board. Adding a director, therefore, is clearly not gender neutral. Although we find that women tend to serve on better performing firms, we also document insignificant abnormal returns on the announcement of a woman added to the board. Rather than the demand for women directors being performance based, our results suggest corporations responding to either internal or external calls for diversity.

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“…Hitherto, several perspectives on wealth effects following takeovers have been studied in finance literature, thereby addressing specific issues such as method of payment (Franks et al 1988;Travlos 1987), identity of target (Chang 1998), methodology (Asquith et al 1983), firm size (Moeller et al 2004), and the impact of sector-specific characteristics (Allen and Sirmans 1987;Subrahmanyam and Rangan 1997).…”

Section: Shareholder Wealth Effects Following Takeoversmentioning

confidence: 99%

How Does the Market for Corporate Control Function for Property Companies?

Eichholtz

Kok

2007

J Real Estate Finan Econ

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We investigate 95 takeovers of property companies all over the world and find that only two of those are hostile. To determine the effectiveness of the market for corporate control, we first study characteristics of targets and acquirers compared to a control sample, using the complete global universe of listed property companies during the most recent takeover wave (1999)(2000)(2001)(2002)(2003)(2004). We find that the inefficient management hypothesis holds for both REITs and non-REITs, as targets exhibit significant underperformance before takeovers. In the second part of this study, we investigate shareholder wealth effects following takeovers and confirm previous findings that abnormal returns for targets and bidders are distinctly different for the real estate sector. Moreover, we show that this difference not only holds for REIT-to-REIT mergers, but also for mergers of real estate firms without a REIT-status.

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The Role of outside Directors in Bank Acquisitions

Cited by 176 publications

References 37 publications

Corporate Governance and Accounting Performance: A Balanced Scorecard Approach

Corporate Governance and Accounting Performance: A Balanced Scorecard Approach

Additions to corporate boards: the effect of gender

How Does the Market for Corporate Control Function for Property Companies?

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