Abstract:

This study aims to examine the influence of bank board characteristics, an essential dimension of corporate governance, on the extent of discipline exercised on banks, by depositors, in the emerging economy of India. We employ fixed effects panel data estimation technique, followed by generalized method of moments, on a dataset of Indian commercial banks from 2013 to 2024. Findings suggest that board characteristics, specifically board size, independence, frequency of meetings and CEO duality, influence the perceptions and monitoring incentives of depositors. Our evidence supports the literature on signaling theory in the context of corporate boards, highlighting that board characteristics can be used to communicate various values to the firm stakeholders. To the best of our knowledge, this is the first study investigating the influence of board characteristics on bank discipline, thereby facilitating bank managers and policymakers in making better decisions regarding board composition, keeping in mind the perception of depositors.

Please choose your submission type: Full Paper

Primary Track: Corporate Governance

Keywords: Ownership and Board Structure ;Boards of Directors and Top Management Teams

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Prof Abha Shukla