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Impact of board of directors on insolvency risk: which role of the corruption control? Evidence from OECD banks

Author

Listed:
  • Marwa Sallemi

    (Higher Institute of Management of Gabes)

  • Salah Ben Hamad

    (University of Economics and Management of Tunis)

  • Nejla Ould Daoud Ellili

    (Abu Dhabi University)

Abstract

This study examines the relationship between corporate governance and banking stability by considering the moderating role of corruption controls. This study applies the Generalized Moments Method using a sample of panel data collected from 74 banks in 10 Organization for Economic Co-operation and Development countries during the period 2006–2016. The empirical results reveal that banking governance is positively associated with banking stability as measured by the Z-score. Additionally, the findings indicate that effective corruption control significantly moderates the power of the board of directors in boosting banking stability. This study discerns the fundamental role of the board of directors as the main corporate governance mechanism and internal player in the stability of banking institutions.

Suggested Citation

  • Marwa Sallemi & Salah Ben Hamad & Nejla Ould Daoud Ellili, 2023. "Impact of board of directors on insolvency risk: which role of the corruption control? Evidence from OECD banks," Review of Managerial Science, Springer, vol. 17(8), pages 2831-2868, November.
    • Handle: RePEc:spr:rvmgts:v:17:y:2023:i:8:d:10.1007_s11846-022-00605-w
    DOI: 10.1007/s11846-022-00605-w
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    More about this item

    Keywords

    Board of directors; Corruption control index (CCI); Corporate governance; Z-score; OECD banks;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General

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