The effect of CEO power on bank risk: do boards and institutional investors matter?

Yener Altunbaş, John Thornton, Yurtsev Uymaz

Research output: Contribution to journalArticle

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Abstract

We test for a link between CEO power and risk-taking in US banks. Banks are more likely to take risks if they have powerful CEOs and relatively poor balance sheets. There is little evidence that executive board size and independence have a dampening effect on the channels through which powerful CEOs influence risk-taking and some evidence that institutional investors reinforce the risk-taking preferences of powerful CEOs.
Original languageEnglish
Article number101202
JournalFinance Research Letters
Volume33
Early online date4 Jun 2019
DOIs
Publication statusPublished - Mar 2020

Keywords

  • Banks
  • Boards of directors
  • CEO power
  • Governance
  • Institutional investors
  • Risk

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