Board governance, diversity and efficiency: evidence from ASEAN-5 commercial banks
The role of sound corporate governance in the banking industry is exacerbated following the disastrous effects of the Asian Financial Crisis and the Global Financial Crisis in in 1998 and 2008 respectively. A common theme to the crises was the tendency of banks to engage in risky business such as of...
| Main Authors: | , , , |
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| Format: | Proceeding Paper |
| Language: | English |
| Published: |
UUM College of Law, Government and International Studies Universiti Utara Malaysia
2014
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| Subjects: | |
| Online Access: | http://irep.iium.edu.my/39930/ http://irep.iium.edu.my/39930/5/BOARD_GOVERNANCE.pdf |
| _version_ | 1848781871848095744 |
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| author | Ramly, Zulkufly Chan, Sok Gee Sapiei, Noor Sharoja Mustapha, Mohd Zulkhairi |
| author_facet | Ramly, Zulkufly Chan, Sok Gee Sapiei, Noor Sharoja Mustapha, Mohd Zulkhairi |
| author_sort | Ramly, Zulkufly |
| building | IIUM Repository |
| collection | Online Access |
| description | The role of sound corporate governance in the banking industry is exacerbated following the disastrous effects of the Asian Financial Crisis and the Global Financial Crisis in in 1998 and 2008 respectively. A common theme to the crises was the tendency of banks to engage in risky business such as off-balance sheet and imprudent lending activities, which contributed to the failure in resource allocation and of the payment system. A key aspect of corporate governance is the effectiveness of the board of directors to steer commercial banks to greater accountability and ultimately enhancing performance. This study examines the effect of board governance and diversity on the efficiency of commercial banks in Malaysia, Indonesia, Thailand, Singapore and the Philippines or ASEAN-5. Using unbalanced panel data from 1998 to 2012, the results of Generalized Least Squares regression show that board size, ratio of independent directors and board diversity variables have positive effect on bank efficiency. However, the net effect of one board governance mechanism is more likely to be contingent on the level of corporate outcome that it is expected to influence. High efficiency banks seem to benefit from a larger board size, higher ratio of independent directors and board diversity. This study provides supporting evidence for the results of prior studies that showed that the effects of board size and board independence vary and is more likely to be contingent on the level of corporate outcome that it is expected to influence. |
| first_indexed | 2025-11-14T15:56:27Z |
| format | Proceeding Paper |
| id | iium-39930 |
| institution | International Islamic University Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-14T15:56:27Z |
| publishDate | 2014 |
| publisher | UUM College of Law, Government and International Studies Universiti Utara Malaysia |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | iium-399302016-09-20T07:03:05Z http://irep.iium.edu.my/39930/ Board governance, diversity and efficiency: evidence from ASEAN-5 commercial banks Ramly, Zulkufly Chan, Sok Gee Sapiei, Noor Sharoja Mustapha, Mohd Zulkhairi HG1501 Banking The role of sound corporate governance in the banking industry is exacerbated following the disastrous effects of the Asian Financial Crisis and the Global Financial Crisis in in 1998 and 2008 respectively. A common theme to the crises was the tendency of banks to engage in risky business such as off-balance sheet and imprudent lending activities, which contributed to the failure in resource allocation and of the payment system. A key aspect of corporate governance is the effectiveness of the board of directors to steer commercial banks to greater accountability and ultimately enhancing performance. This study examines the effect of board governance and diversity on the efficiency of commercial banks in Malaysia, Indonesia, Thailand, Singapore and the Philippines or ASEAN-5. Using unbalanced panel data from 1998 to 2012, the results of Generalized Least Squares regression show that board size, ratio of independent directors and board diversity variables have positive effect on bank efficiency. However, the net effect of one board governance mechanism is more likely to be contingent on the level of corporate outcome that it is expected to influence. High efficiency banks seem to benefit from a larger board size, higher ratio of independent directors and board diversity. This study provides supporting evidence for the results of prior studies that showed that the effects of board size and board independence vary and is more likely to be contingent on the level of corporate outcome that it is expected to influence. UUM College of Law, Government and International Studies Universiti Utara Malaysia 2014 Proceeding Paper PeerReviewed application/pdf en http://irep.iium.edu.my/39930/5/BOARD_GOVERNANCE.pdf Ramly, Zulkufly and Chan, Sok Gee and Sapiei, Noor Sharoja and Mustapha, Mohd Zulkhairi (2014) Board governance, diversity and efficiency: evidence from ASEAN-5 commercial banks. In: The UUM International Conference on Governance 2014 (ICG 2014), 29th-30th Nov. 2014, Famingo Hotel by the Beach, Penang, Malaysia. |
| spellingShingle | HG1501 Banking Ramly, Zulkufly Chan, Sok Gee Sapiei, Noor Sharoja Mustapha, Mohd Zulkhairi Board governance, diversity and efficiency: evidence from ASEAN-5 commercial banks |
| title | Board governance, diversity and efficiency: evidence from ASEAN-5 commercial banks |
| title_full | Board governance, diversity and efficiency: evidence from ASEAN-5 commercial banks |
| title_fullStr | Board governance, diversity and efficiency: evidence from ASEAN-5 commercial banks |
| title_full_unstemmed | Board governance, diversity and efficiency: evidence from ASEAN-5 commercial banks |
| title_short | Board governance, diversity and efficiency: evidence from ASEAN-5 commercial banks |
| title_sort | board governance, diversity and efficiency: evidence from asean-5 commercial banks |
| topic | HG1501 Banking |
| url | http://irep.iium.edu.my/39930/ http://irep.iium.edu.my/39930/5/BOARD_GOVERNANCE.pdf |