IDEAS home Printed from https://ideas.repec.org/a/fan/macoma/vhtml10.3280-maco2017-002007.html
   My bibliography  Save this article

Caratteristiche dell?Audit Committee e Gestione del Rischio Bancario: un?analisi empirica del contesto europeo

Author

Listed:
  • Davide Rizzotti
  • Claudia Frisenna

Abstract

This paper examines how three Audit Committee characteristics (i.e., busyness, independence, and gender diversity) affect the effectiveness of its monitoring over bank risk taking and bank risk management strategies. It also explores whether country-cultural features shape the above relationships. Empirically, we analyse, using descriptive statistics and regression models, a sample of European commercial banks listed in the STOXX EUROPE 600 BANKS (ticker SX7P) between 1/1/2008 and 31/12/2013, investigating the direct impact of the Audit Committee characteristics on the bank risk taking, and the moderating effect on the risk-performance relation. In order to examine the role of national culture, we compare two subsamples of European countries, namely SIP (Spain, Italy and Portugal) and NON-SIP countries, characterized by different level of mutual social control, trust on stranger, and gender equality. Data regarding audit committee and board of directors were hand collected from each firm?s Internet site, while financial data concerning ROA, leverage, total assets and stock price series were collected from the Datastream database.

Suggested Citation

  • Davide Rizzotti & Claudia Frisenna, 2017. "Caratteristiche dell?Audit Committee e Gestione del Rischio Bancario: un?analisi empirica del contesto europeo," MANAGEMENT CONTROL, FrancoAngeli Editore, vol. 2017(2), pages 125-146.
    • Handle: RePEc:fan:macoma:v:html10.3280/maco2017-002007
    as

    Download full text from publisher

    File URL: http://www.francoangeli.it/riviste/Scheda_Rivista.aspx?IDArticolo=59487&Tipo=ArticoloPDF
    Download Restriction: Single articles can be downloaded buying download credits, for info: https://www.francoangeli.it/DownloadCredit
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Bin Srinidhi & Ferdinand A. Gul & Judy Tsui, 2011. "Female Directors and Earnings Quality," Contemporary Accounting Research, John Wiley & Sons, vol. 28(5), pages 1610-1644, December.
    2. Galai, Dan & Masulis, Ronald W., 1976. "The option pricing model and the risk factor of stock," Journal of Financial Economics, Elsevier, vol. 3(1-2), pages 53-81.
    3. Andres, Pablo de & Vallelado, Eleuterio, 2008. "Corporate governance in banking: The role of the board of directors," Journal of Banking & Finance, Elsevier, vol. 32(12), pages 2570-2580, December.
    4. Bozzano, Monica, 2017. "On the historical roots of women's empowerment across Italian provinces: religion or family culture?," European Journal of Political Economy, Elsevier, vol. 49(C), pages 24-46.
    5. Shleifer, Andrei & Vishny, Robert W, 1986. "Large Shareholders and Corporate Control," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages 461-488, June.
    6. Adams, Renée B. & Mehran, Hamid, 2012. "Bank board structure and performance: Evidence for large bank holding companies," Journal of Financial Intermediation, Elsevier, vol. 21(2), pages 243-267.
    7. Minton, Bernadette & Taillard, Jerome P. A. & Williamson, Rohan, 2010. "Do Independence and Financial Expertise of the Board Matter for Risk Taking and Performance?," Working Paper Series 2010-14, Ohio State University, Charles A. Dice Center for Research in Financial Economics.
    8. Dan Dhaliwal & Vic Naiker & Farshid Navissi, 2010. "The Association Between Accruals Quality and the Characteristics of Accounting Experts and Mix of Expertise on Audit Committees," Contemporary Accounting Research, John Wiley & Sons, vol. 27(3), pages 787-827, September.
    9. Eliezer M. Fich & Anil Shivdasani, 2006. "Are Busy Boards Effective Monitors?," Journal of Finance, American Finance Association, vol. 61(2), pages 689-724, April.
    10. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    11. Stulz, Rene M. & Williamson, Rohan, 2003. "Culture, openness, and finance," Journal of Financial Economics, Elsevier, vol. 70(3), pages 313-349, December.
    12. Pathan, Shams, 2009. "Strong boards, CEO power and bank risk-taking," Journal of Banking & Finance, Elsevier, vol. 33(7), pages 1340-1350, July.
    13. Laeven, Luc & Levine, Ross, 2009. "Bank governance, regulation and risk taking," Journal of Financial Economics, Elsevier, vol. 93(2), pages 259-275, August.
    14. La Porta, Rafael, et al, 1997. "Trust in Large Organizations," American Economic Review, American Economic Association, vol. 87(2), pages 333-338, May.
    15. Benito Arruñada, 2010. "Protestants and Catholics: Similar Work Ethic, Different Social Ethic," Economic Journal, Royal Economic Society, vol. 120(547), pages 890-918, September.
    16. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2006. "Does Culture Affect Economic Outcomes?," Journal of Economic Perspectives, American Economic Association, vol. 20(2), pages 23-48, Spring.
    17. Guiso, Luigi & Sapienza, Paola & Zingales, Luigi, 2003. "People's opium? Religion and economic attitudes," Journal of Monetary Economics, Elsevier, vol. 50(1), pages 225-282, January.
    18. Jiraporn, Pornsit & Singh, Manohar & Lee, Chun I., 2009. "Ineffective corporate governance: Director busyness and board committee memberships," Journal of Banking & Finance, Elsevier, vol. 33(5), pages 819-828, May.
    19. Pathan, Shams & Faff, Robert, 2013. "Does board structure in banks really affect their performance?," Journal of Banking & Finance, Elsevier, vol. 37(5), pages 1573-1589.
    20. Sergio Beretta & Saverio Bozzolan & Giovanna Michelon, 2011. "La disclosure sul sistema di controllo interno come meccanismo di monitoraggio: evidenze empiriche da differenti contesti istituzionali," MANAGEMENT CONTROL, FrancoAngeli Editore, vol. 2011(1), pages 125-149.
    21. Anderson, Ronald C. & Mansi, Sattar A. & Reeb, David M., 2004. "Board characteristics, accounting report integrity, and the cost of debt," Journal of Accounting and Economics, Elsevier, vol. 37(3), pages 315-342, September.
    22. Jiraporn, Pornsit & Davidson III, Wallace N. & DaDalt, Peter & Ning, Yixi, 2009. "Too busy to show up? An analysis of directors' absences," The Quarterly Review of Economics and Finance, Elsevier, vol. 49(3), pages 1159-1171, August.
    23. Klein, April, 2002. "Audit committee, board of director characteristics, and earnings management," Journal of Accounting and Economics, Elsevier, vol. 33(3), pages 375-400, August.
    24. Adams, Renée B. & Ferreira, Daniel, 2009. "Women in the boardroom and their impact on governance and performance," Journal of Financial Economics, Elsevier, vol. 94(2), pages 291-309, November.
    25. Fama, Eugene F & Jensen, Michael C, 1983. "Separation of Ownership and Control," Journal of Law and Economics, University of Chicago Press, vol. 26(2), pages 301-325, June.
    26. Kenneth R. Ahern & Amy K. Dittmar, 2012. "The Changing of the Boards: The Impact on Firm Valuation of Mandated Female Board Representation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 127(1), pages 137-197.
    27. Sun, Jerry & Liu, Guoping, 2014. "Audit committees’ oversight of bank risk-taking," Journal of Banking & Finance, Elsevier, vol. 40(C), pages 376-387.
    28. Anderson, Ronald C. & Fraser, Donald R., 2000. "Corporate control, bank risk taking, and the health of the banking industry," Journal of Banking & Finance, Elsevier, vol. 24(8), pages 1383-1398, August.
    29. Chen, Carl R. & Steiner, Thomas L. & Whyte, Ann Marie, 2006. "Does stock option-based executive compensation induce risk-taking? An analysis of the banking industry," Journal of Banking & Finance, Elsevier, vol. 30(3), pages 915-945, March.
    30. Gopal V. Krishnan & Gnanakumar Visvanathan, 2008. "Does the SOX Definition of an Accounting Expert Matter? The Association between Audit Committee Directors' Accounting Expertise and Accounting Conservatism," Contemporary Accounting Research, John Wiley & Sons, vol. 25(3), pages 827-858, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Francesca Francioli, 2018. "Strategic performance management systems in Italian banks. A research note," MANAGEMENT CONTROL, FrancoAngeli Editore, vol. 2018(2), pages 155-178.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sun, Jerry & Liu, Guoping, 2014. "Audit committees’ oversight of bank risk-taking," Journal of Banking & Finance, Elsevier, vol. 40(C), pages 376-387.
    2. Fan, Yaoyao & Jiang, Yuxiang & Zhang, Xuezhi & Zhou, Yue, 2019. "Women on boards and bank earnings management: From zero to hero," Journal of Banking & Finance, Elsevier, vol. 107(C), pages 1-1.
    3. Hidaya Lawati & Khaled Hussainey & Roza Sagitova, 2021. "Disclosure quality vis-à-vis disclosure quantity: Does audit committee matter in Omani financial institutions?," Review of Quantitative Finance and Accounting, Springer, vol. 57(2), pages 557-594, August.
    4. Shkendije Himaj, 2014. "Corporate Governance in Banks and its Impact on Risk and Performance: Review of Literature on the Selected Governance Mechanisms," Journal of Central Banking Theory and Practice, Central bank of Montenegro, vol. 3(3), pages 53-85.
    5. Mollah, Sabur & Skully, Michael & Liljeblom, Eva, 2021. "Strong Boards and Risk-taking in Islamic Banks," Review of Corporate Finance, now publishers, vol. 1(1-2), pages 135-180, April.
    6. Unda, Luisa A. & Ranasinghe, Dinithi, 2021. "To pay or not pay: Board remuneration and insolvency risk in credit unions," Pacific-Basin Finance Journal, Elsevier, vol. 66(C).
    7. José María Díez-Esteban & Jorge Bento Farinha & Conrado Diego García-Gómez & Cesario Mateus, 2022. "Does board composition and ownership structure affect banks’ systemic risk? European evidence," Journal of Banking Regulation, Palgrave Macmillan, vol. 23(2), pages 155-172, June.
    8. Catarina Fernandes & Jorge Farinha & Francisco Vitorino Martins & Cesario Mateus, 2018. "Bank governance and performance: a survey of the literature," Journal of Banking Regulation, Palgrave Macmillan, vol. 19(3), pages 236-256, July.
    9. Franco Ernesto Rubino & Paolo Tenuta & Domenico Rocco Cambrea, 2017. "Board characteristics effects on performance in family and non-family business: a multi-theoretical approach," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 21(3), pages 623-658, September.
    10. Liang, Qi & Xu, Pisun & Jiraporn, Pornsit, 2013. "Board characteristics and Chinese bank performance," Journal of Banking & Finance, Elsevier, vol. 37(8), pages 2953-2968.
    11. Addo, Kwabena Aboah & Hussain, Nazim & Iqbal, Jamshed, 2021. "Corporate Governance and Banking Systemic Risk: A Test of the Bundling Hypothesis," Journal of International Money and Finance, Elsevier, vol. 115(C).
    12. Thierno Barry & Laetitia Lepetit & Frank Strobel & Thu Tran, 2018. "Better than independent: the role of minority directors on bank boards," Working Papers hal-01937927, HAL.
    13. Goh, Lisa & Gupta, Aditi, 2016. "Remuneration of non-executive directors: Evidence from the UK," The British Accounting Review, Elsevier, vol. 48(3), pages 379-399.
    14. Mohamed Marie & Hany Kamel & Israa Elbendary, 2021. "How does internal governance affect banks’ financial stability? Empirical evidence from Egypt," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 18(3), pages 240-255, September.
    15. Zhou, Yifan & Kara, Alper & Molyneux, Philip, 2019. "Chair-CEO generation gap and bank risk-taking," The British Accounting Review, Elsevier, vol. 51(4), pages 352-372.
    16. Mamduh Hanafi & Fitri Santi & Muazaroh, 2013. "The Impact of Ownership Concentration, Commissioners on Bank Risk and Profitability: Evidence from Indonesia," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 3(2), pages 183-202, December.
    17. Belaounia, Samia & Tao, Ran & Zhao, Hong, 2020. "Gender equality's impact on female directors’ efficacy: A multi-country study," International Business Review, Elsevier, vol. 29(5).
    18. Laura Baselga-Pascual & Antonio Trujillo-Ponce & Emilia Vähämaa & Sami Vähämaa, 2018. "Ethical Reputation of Financial Institutions: Do Board Characteristics Matter?," Journal of Business Ethics, Springer, vol. 148(3), pages 489-510, March.
    19. Talavera, Oleksandr & Yin, Shuxing & Zhang, Mao, 2016. "Managing the diversity: board age diversity, directors’ personal values, and bank performance," MPRA Paper 71927, University Library of Munich, Germany.
    20. Bowo Setiyono & Amine Tarazi, 2018. "Does Diversity of Bank Board Members Affect Performance and Risk? Evidence from an Emerging Market," CSR, Sustainability, Ethics & Governance, in: Belén Díaz Díaz & Samuel O. Idowu & Philip Molyneux (ed.), Corporate Governance in Banking and Investor Protection, chapter 0, pages 185-218, Springer.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fan:macoma:v:html10.3280/maco2017-002007. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Stefania Rosato (email available below). General contact details of provider: http://www.francoangeli.it/riviste/sommario.aspx?IDRivista=166 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.