Skip to main content
Disciplines
Automotive Business IT + Informatics Construction + Real Estate Electrical Engineering + Electronics Energy + Sustainability Insurance + Risk Finance + Banking Management + Leadership Marketing + Sales Mechanical Engineering + Materials
Events
DE
EN
Books
Journals
Topic Page
Marketing
Start single access now
Access for companies
EXTENDED SEARCH
Log in
Top
Published in:
Theories in Corporate Governance Read chapter Read first chapter

2022 | OriginalPaper | Chapter

3. Setting the Stage: Board Busyness as a Matter of Modern Banking Context

Author : Vu Quang Trinh

Published in: Fundamentals of Board Busyness and Corporate Governance

Publisher: Springer International Publishing

Log in

Activate our intelligent search to find suitable subject content or patents.

search-config
loading …

Abstract

This chapter provides readers some fundamental knowledge about the multiple directorships of boards and directors related theories which include the reputation and busyness hypotheses. Multiple directorships are not only observed as a positive indicator for the benefits of directors but also as a negative sign for the risks of directors being stretched thin. The reputation and busyness hypotheses explain such positive and negative signs of board busyness, respectively. In addition, researchers and students can understand why board busyness could be a matter of modern banking context and update some empirical evidence on the effects of multiple board appointments of directors in the banking sector.

Dont have a licence yet? Then find out more about our products and how to get one now:

Springer Professional "Wirtschaft+Technik"

Online-Abonnement

Mit Springer Professional "Wirtschaft+Technik" erhalten Sie Zugriff auf:

  • über 102.000 Bücher
  • über 537 Zeitschriften

aus folgenden Fachgebieten:

  • Automobil + Motoren
  • Bauwesen + Immobilien
  • Business IT + Informatik
  • Elektrotechnik + Elektronik
  • Energie + Nachhaltigkeit
  • Finance + Banking
  • Management + Führung
  • Marketing + Vertrieb
  • Maschinenbau + Werkstoffe
  • Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

inform now

Springer Professional "Wirtschaft"

Online-Abonnement

Mit Springer Professional "Wirtschaft" erhalten Sie Zugriff auf:

  • über 67.000 Bücher
  • über 340 Zeitschriften

aus folgenden Fachgebieten:

  • Bauwesen + Immobilien
  • Business IT + Informatik
  • Finance + Banking
  • Management + Führung
  • Marketing + Vertrieb
  • Versicherung + Risiko




Jetzt Wissensvorsprung sichern!

inform now
previous chapter Corporate Governance in Banking
next chapter Dual Banking System: Conventional and Islamic Banks
Literature
Adams, R., and H. Mehran, 2003. Is corporate governance different for bank holding companies?. SSRN.
Adams, R.B., and H. Mehran. 2012. Bank board structure and performance: Evidence for large bank holding companies. Journal of Financial Intermediation 21 (2): 243–267.CrossRef
Ahn, S., P. Jiraporn, and Y.S. Kim. 2010. Multiple directorships and acquirer returns. Journal of Banking & Finance 34 (9): 2011–2026.CrossRef
Ahuja, G. 2000. Collaboration networks, structural holes, and innovation: A longitudinal study. Administrative Science Quarterly 45 (3): 425–455.CrossRef
Andres, D.P., and E. Vallelado. 2008. Corporate governance in banking: The role of the board of directors. Journal of Banking & Finance 32 (12): 2570–2580.CrossRef
Bai, G., and E. Elyasiani. 2013. Bank stability and managerial compensation. Journal of Banking & Finance 37 (3): 799–813.CrossRef
Beasley, M.S. 1996. An empirical analysis of the relation between the board of director composition and financial statement fraud. Accounting Review 71: 443–465.
Booth, J.R., and D.N. Deli. 1996. Factors affecting the number of outside directorships held by CEOs. Journal of Financial Economics 40 (1): 81–104.CrossRef
Booth, J.R., M.M. Cornett, and H. Tehranian. 2002. Boards of directors, ownership, and regulation. Journal of Banking & Finance 26 (10): 1973–1996.CrossRef
Brickley, J.A., J.S. Linck, and J.L. Coles. 1999. What happens to CEOs after they retire? New evidence on career concerns, horizon problems, and CEO incentives. Journal of Financial Economics 52 (3): 341–377.CrossRef
Brown, W.O., and M.T. Maloney. 1999. Exit, voice, and the role of corporate directors: Evidence from acquisition performance. Available at SSRN 160308.
Burt, R.S. 1997. A note on social capital and network content. Social Networks 19 (4): 355–373.CrossRef
Carpenter, M.A., and J.D. Westphal. 2001. The strategic context of external network ties: Examining the impact of director appointments on board involvement in strategic decision making. Academy of Management Journal 44 (4): 639–660.CrossRef
Cashman, G.D., S.L. Gillan, and C. Jun. 2012. Going overboard? On busy directors and firm value. Journal of Banking & Finance 36 (12): 3248–3259.CrossRef
Chakravarty, S., and L.G. Rutherford. 2017. Do busy directors influence the cost of debt? An examination through the lens of takeover vulnerability. Journal of Corporate Finance 43: 429–443.CrossRef
Chou, T.K., and H.L. Feng. 2018. Multiple directorships and the value of cash holdings. Review of Quantitative Finance and Accounting, pp. 1–37.
Coles, J.L., N.D. Daniel, and L. Naveen. 2008. Boards: Does one size fit all? Journal of Financial Economics 87 (2): 329–356.CrossRef
Cooper, E., and H. Uzun. 2012. Directors with a full plate: The impact of busy directors on bank risk. Managerial Finance 38 (6): 571–586.CrossRef
Core, J.E., R.W. Holthausen, and D.F. Larcker. 1999. Corporate governance, chief executive officer compensation, and firm performance. Journal of Financial Economics 51 (3): 371–406.CrossRef
Cornett, M.M., J.J. McNutt, and H. Tehranian. 2009. Corporate governance and earnings management at large US bank holding companies. Journal of Corporate Finance 15 (4): 412–430.CrossRef
Cotter, J.F., A. Shivdasani, and M. Zenner. 1997. Do independent directors enhance target shareholder wealth during tender offers? Journal of Financial Economics 43 (2): 195–218.CrossRef
Eisenhardt, K.M. 1989. Agency theory: An assessment and review. Academy of Management Review 14 (1): 57–74.CrossRef
Elyasiani, E., and L. Zhang. 2015. Bank holding company performance, risk, and “busy” board of directors. Journal of Banking & Finance 60: 239–251.CrossRef
Falato, A., D. Kadyrzhanova, and U. Lel. 2014. Distracted directors: Does board busyness hurt shareholder value? Journal of Financial Economics 113 (3): 404–426.CrossRef
Faleye, O., R. Hoitash, and U. Hoitash. 2011. The costs of intense board monitoring. Journal of Financial Economics 101 (1): 160–181.CrossRef
Fama, E.F. 1980. Agency problems and the theory of the firm. Journal of Political Economy 88 (2): 288–307.CrossRef
Fama, E.F., and M.C. Jensen. 1983a. Separation of ownership and control. The Journal of Law and Economics 26 (2): 301–325.CrossRef
———. 1983b. Agency problems and residual claims. The Journal of Law and Economics 26 (2): 327–349.CrossRef
Ferris, S.P., M. Jagannathan, and A.C. Pritchard. 2003. Too busy to mind the business? Monitoring by directors with multiple board appointments. The Journal of Finance 58 (3): 1087–1111.CrossRef
Fich, E.M., and A. Shivdasani. 2006. Are busy boards effective monitors? The Journal of Finance 61 (2): 689–724.CrossRef
Field, L., M. Lowry, and A. Mkrtchyan. 2013. Are busy boards detrimental? Journal of Financial Economics 109 (1): 63–82.CrossRef
Forbes, D.P., and F.J. Milliken. 1999. Cognition and corporate governance: Understanding boards of directors as strategic decision-making groups. Academy of Management Review 24 (3): 489–505.CrossRef
Gilson, S.C. 1990. Bankruptcy, boards, banks, and blockholders: Evidence on changes in corporate ownership and control when firms default. Journal of Financial Economics 27 (2): 355–387.CrossRef
Granovetter, M.S. 1973. The strength of weak ties. American Journal of Sociology 78 (6): 1360–1380.CrossRef
Harford, J. 2003. Takeover bids and target directors’ incentives: The impact of a bid on directors’ wealth and board seats. Journal of Financial Economics 69 (1): 51–83.CrossRef
Harris, I.C., and K. Shimizu. 2004. Too busy to serve? An examination of the influence of overboarded directors. Journal of Management Studies 41 (5): 775–798.CrossRef
Hart, S.L. 1995. A natural-resource-based view of the firm. Academy of Management Review 20 (4): 986–1014.CrossRef
Haunschild, P.R. 1993. Interorganizational imitation: The impact of interlocks on corporate acquisition activity. Administrative Science Quarterly 38: 564–592.CrossRef
Haunschild, P.R., and C.M. Beckman. 1998. When do interlocks matter?: Alternate sources of information and interlock influence. Administrative Science Quarterly 43: 815–844.CrossRef
Hauser, R. 2018. Busy directors and firm performance: Evidence from mergers. Journal of Financial Economics 128 (1): 16–37.CrossRef
Hillman, A.J., and T. Dalziel. 2003. Boards of directors and firm performance: Integrating agency and resource dependence perspectives. Academy of Management Review 28 (3): 383–396.CrossRef
Jackling, B., and S. Johl. 2009. Board structure and firm performance: Evidence from India’s top companies. Corporate Governance: An International Review 17 (4): 492–509.CrossRef
Jackson, D., and F. Fang. 2014. CEO networks and bank risk taking. Banking and Finance Review.
Jiraporn, P., Y.S. Kim, and W.N. Davidson III. 2008. Multiple directorships and corporate diversification. Journal of Empirical Finance 15 (3): 418–435.CrossRef
Jiraporn, P., M. Singh, and C.I. Lee. 2009. Ineffective corporate governance: Director busyness and board committee memberships. Journal of Banking & Finance 33 (5): 819–828.CrossRef
John, T.A., and K. John. 1993. Top-management compensation and capital structure. The Journal of Finance 48 (3): 949–974.CrossRef
Kaplan, S.N., and D. Reishus. 1990. Outside directorships and corporate performance. Journal of Financial Economics 27 (2): 389–410.CrossRef
Klein, A. 1998. Firm performance and board committee structure. The Journal of Law and Economics 41 (1): 275–304.CrossRef
Kutubi, S.S., K. Ahmed, and H. Khan. 2018. Bank performance and risk-taking—Does directors’ busyness matter? Pacific-Basin Finance Journal 50: 184–199.CrossRef
Lahsasna, A. 2010. Introduction to fatwa, Shariah supervision & governance in Islamic finance. CERT Publications Sdn. Bhd.
Lang, J.R., and D.E. Lockhart. 1990. Increased environmental uncertainty and changes in board linkage patterns. Academy of Management Journal 33 (1): 106–128.CrossRef
Lei, A.C., and J. Deng. 2014. Do multiple directorships increase firm value? Evidence from independent directors in Hong Kong. Journal of International Financial Management & Accounting 25 (2): 121–181.CrossRef
Linck, J.S., J.M. Netter, and T. Yang. 2009. The effects and unintended consequences of the Sarbanes-Oxley Act on the supply and demand for directors. The Review of Financial Studies 22 (8): 3287–3328.CrossRef
Mace, M. 1986. Directors: Myth and reality. Boston, MA: Harvard Business School Press.
Macey, J., and M. O’hara. 2003. The corporate governance of banks. Economic Policy Review, 9(1).
Mehran, H., and L. Mollineaux. 2012. Corporate governance of financial institutions. Annual Review of Financial Economics 4 (1): 215–232.CrossRef
Mehran, H., A. Morrison, and J. Shapiro. 2011. Corporate governance and banks: What have we learned from the financial crisis?. FRB of New York Staff Report.
Miwa, Y., and J.M. Ramseyer. 2000. Corporate governance in transitional economies: lessons from the prewar Japanese cotton textile industry. The Journal of Legal Studies 29 (1): 171–203.CrossRef
Mizruchi, M.S. 1996. What do interlocks do? An analysis, critique, and assessment of research on interlocking directorates. Annual Review of Sociology 22 (1): 271–298.CrossRef
O’hara, M. 1983. A dynamic theory of the banking firm. The Journal of Finance 38 (1): 127–140.CrossRef
Palmer, D.A., P.D. Jennings, and X. Zhou. 1993. Late adoption of the multidivisional form by large US corporations: Institutional, political, and economic accounts. Administrative Science Quarterly, pp. 100–131.
Pathan, S. 2009. Strong boards, CEO power and bank risk-taking. Journal of Banking & Finance 33 (7): 1340–1350.CrossRef
Pathan, S., and R. Faff. 2013. Does board structure in banks really affect their performance? Journal of Banking & Finance 37 (5): 1573–1589.CrossRef
Pfeffer, J. 1972. Size and composition of corporate boards of directors: The organization and its environment. Administrative Science Quarterly, pp. 218–228.
Pfeffer, J., and G.R. Salancik. 1978. The External Control of Organisations: A Resource Dependence Perspective. New York: Harper & Row.
Pi, L., and S.G. Timme. 1993. Corporate control and bank efficiency. Journal of Banking & Finance 17 (2–3): 515–530.CrossRef
Safiullah, M., and A. Shamsuddin. 2019. Risk-adjusted efficiency and corporate governance: Evidence from Islamic and conventional banks. Journal of Corporate Finance 55: 105–140.CrossRef
Sharma, V. 2011. Independent directors and the propensity to pay dividends. Journal of Corporate Finance 17 (4): 1001–1015.CrossRef
Shivdasani, A. 1993. Board composition, ownership structure, and hostile takeovers. Journal of Accounting and Economics 16 (1–3): 167–198.CrossRef
Shivdasani, A., and D. Yermack. 1999. CEO involvement in the selection of new board members: An empirical analysis. The Journal of Finance 54 (5): 1829–1853.CrossRef
Sierra, G.E., E. Talmor, and J.S. Wallace. 2006. An examination of multiple governance forces within bank holding companies. Journal of Financial Services Research 29 (2): 105–123.CrossRef
Toufik, B.B. 2015. The Role of Shari ah Supervisory Board (SSB) in Ensuring Good Corporate Governance Practice in Islamic Banks. International Journal of Contemporary Applied Sciences 2 (2): 109–118.
Trinh, V.Q., M. Elnahass, and A. Salama. 2021. Board busyness and new insights into alternative bank dividends models. Review of Quantitative Finance and Accounting 56 (4): 1289–1328.CrossRef
Vafeas, N. 1999. Board meeting frequency and firm performance. Journal of Financial Economics 53 (1): 113–142.CrossRef
Williamson, O.E. 1984. Corporate governance. The Yale Law Journal 93: 1197.CrossRef
Wintoki, M.B., J.S. Linck, and J.M. Netter. 2012. Endogeneity and the dynamics of internal corporate governance. Journal of Financial Economics 105 (3): 581–606.CrossRef
Zajac, E.J., and J.D. Westphal 1996, August. Director reputation, CEO/Board power, and the dynamics of board interlocks. In Academy of Management Proceedings (Vol. 1996, No. 1, pp. 254–258). Briarcliff Manor, NY 10510: Academy of Management.
Zhang, E.J. 2016. Preoccupied independent directors. Working paper, UNSW Business School.
Metadata
Title
Setting the Stage: Board Busyness as a Matter of Modern Banking Context
Author
Vu Quang Trinh
Copyright Year
2022
Book
Fundamentals of Board Busyness and Corporate Governance

Print ISBN: 978-3-030-89227-2

Electronic ISBN: 978-3-030-89228-9

Copyright Year: 2022

DOI
https://doi.org/10.1007/978-3-030-89228-9_3