TY - JOUR

T1 - The effect of CEO power on bank risk: Do boards and institutional investors matter?

AU - Altunbaş, Yener

AU - Thornton, John

AU - Uymaz, Yurtsev

PY - 2020/3

Y1 - 2020/3

N2 - We test for a link between CEO power and risk taking in US banks. Banks are more likely to take risks if they have powerful CEOs and relatively poor balance sheets. There is little evidence that executive board size and independence have a dampening effect on the channels through which powerful CEOs influence risk-taking and some evidence that institutional investors reinforce the risk-taking preferences of powerful CEOs.

AB - We test for a link between CEO power and risk taking in US banks. Banks are more likely to take risks if they have powerful CEOs and relatively poor balance sheets. There is little evidence that executive board size and independence have a dampening effect on the channels through which powerful CEOs influence risk-taking and some evidence that institutional investors reinforce the risk-taking preferences of powerful CEOs.

KW - Banks

KW - Governance

KW - Risk

KW - CEO power

KW - Boards of directors

KW - Institutional investors

U2 - 10.1016/j.frl.2019.05.020

DO - 10.1016/j.frl.2019.05.020

M3 - Article

VL - 33

SP - 101202

JO - Finance Research Letters

JF - Finance Research Letters

SN - 1544-6123

ER -