BANK PERFORMANCE AND BOARD STRUCTURE: EVIDENCE FROM TURKEY

Year 2020, Volume: 2 Issue: 1, 1 - 17, 30.10.2020

Güneş Topçu

Abstract

This paper examines the impact of board structure on financial performances of the 14 publicly traded commercial banks operating in Turkey over the period 2007 to 2019. Board structure variables are board size, proportion of independent directors in the board, and the proportion of women directors in the board. I used dynamic panel data analysis and estimated the parameters of the regression equation using the two-step generalized methods of moment (GMM) method. Results of the regression analyses show that while board size and proportion of independent directors in the board have significant and positive impacts on banks’ financial performance, proportion of independent directors in the board does not have a significant impact on banks’ financial performance. As the policy implications, banks should increase the number of independent directors in the board; however, it is difficult to explain the significance of gender diversity in the board as the number of women in the boards is very low for the given sample of banks.

Keywords

Bank performance, independent directors, board size

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