Faculty Publications

Title

Does Independent Industry Expertise Improve Board Effectiveness? Evidence From Bank CEO Turnovers

Document Type

Article

Journal/Book/Conference Title

International Review of Finance

Volume

20

Issue

3

First Page

665

Last Page

699

Abstract

This study explores the impact of independent bank directors’ financial industry expertise on board effectiveness by investigating bank CEO turnovers and post-turnover bank performance. Empirical results find such expertise increases the probability of forced CEO turnover and the probability of outsider succession. It improves bank performance and reduces bank risk-taking following a forced CEO turnover. This is likely because industry-specific expertise enhances boards’ ability to locate a superior successor CEO and to monitor and advise the new management. Market reaction to bank CEO turnover announcements tends to agree with this view.

Original Publication Date

9-1-2020

DOI of published version

10.1111/irfi.12236

Repository

UNI ScholarWorks, Rod Library, University of Northern Iowa

Language

en

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