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THE NEXUS BETWEEN BOARDROOM DIVERSITY AND FINANCIAL PERFORMANCE: THE CASE OF TURKISH BANKING SECTOR

Year 2019, Volume: 37 Issue: 3, 565 - 586, 26.09.2019
https://doi.org/10.17065/huniibf.450543

Abstract

The recent financial crisis has increased interest in investigating the nexus between various corporate governance mechanisms and firm performance. Nevertheless, few studies focus on investigating this nexus for the banking sector. The current study aims to determine the change in the structure of the board of directors in the Turkish banking sector in the period after the global financial crisis (2009-2016) and to determine whether the diversity in boardroom influences the bank performance. For this purpose, average return on assets (ROAA), average return on equity (ROAE) and pre-tax profit/total assets ratios are employed in the measurement of bank performance while size, gender, nationality, level of education and whether or not board members are independent are used in relation to the board structure. Findings revealed a negative and statistically significant nexus between board size and bank performance. Nevertheless, it was found that there is a positive nexus between the proportion of female members and the proportion of members who have postgraduate degree and bank performance. However, the nexus between the proportion of female members and average return on equity and the nexus between the proportion of members who have a postgraduate degree and the pre-tax profit/total assets ratio are statistically significant. On the other hand, there was a negative nexus between bank performance and the proportion of foreign and independent members. However, the nexus between only the proportion of foreign members and return on equity is statistically significant.

References

  • Adams, R.B., H. Mehran (2012), “Bank Board Structure and Performance: Evidence For Large Bank Holding Companies”, Journal of Financial Intermediation, 21(2), 243-267.
  • Aygün, M., A. Taşdemir, E. Çavdar, (2010), “Banka Performansı Üzerinde Yönetim Kurulu Büyüklüğünün Etkisi”, Atatürk Üniversitesi İktisadi ve İdari Bilimler Dergisi, 24(3).
  • BCBS (2010), Principles for Enhancing Corporate Governance, Basel Committee on Banking Supervision, BIS, Basel.
  • BCBS, (2006), International Convergence of Capital Measurement and Capital Standards: A Revised Framework. Basel Committee on Banking Supervision, BIS, Basel.
  • Bhagat, S., B. Bolton, A. Subramanian (2010), “CEO Education, CEO Turnover, and Firm Performance”. Working Paper, University of Colorado at Boulder, 3 August.
  • Campbell, K., A. Mínguez-Vera (2008), “Gender Diversity in the Boardroom and Firm Financial Performance. Journal of Business Ethics, 83(3), 435-451.
  • Caprio, G., R. Levine, (2002), “Corporate Governance in Finance: Concepts and International Observations”, Financial Sector Governance: The Roles of The Public and Private Sectors, 17-50.
  • Carter, D.A., B.J., Simkins, W.G. Simpson, (2003), “Corporate Governance, Board Diversity, and Firm Value”. Financial Review, 38(1), 33-53.
  • Chiaramonte, L., B. Casu (2013), “The Determinants of Bank CDS Spreads: Evidence from the Financial Crisis”, The European Journal of Finance, 19(9), 861-887.
  • Darmadi, S. (2013), “Board Members' Education and Firm Performance: Evidence from a Developing Economy”, International Journal of Commerce and Management, 23(2), 113-135.
  • De Andres, P., E. Vallelado (2008), “Corporate Governance in Banking: The Role of The Board of Directors, Journal of Banking & Finance, 32(12), 2570-2580.
  • Doğan, M., F. Yıldız (2013), “The Impact of The Board of Directors’ Size on The Bank’s Performance: Evidence From Turkey”, European Journal of Business and Management, 5(6), 130-140.
  • Doğan, M., Y. Topal (2016), “Yönetim Kurulundaki Yabancı Üye Sayısının ve Yabancı Sahipliğinin Finansal Performans Üzerindeki Etkisi” Ege Academic Review, 16(1).
  • Fama, E.F., Jensen, M.C. (1983), “Separation of Ownership and Control”, The Journal of Law and Economics, 26(2), 301-325.
  • Georgantopoulos, A.G., I. Filos (2017), “Board Structure and Bank Performance: Evidence for the Greek Banking Industry During Crisis Period” International Journal of Economics and Financial Issues, 7(1), 56-67.
  • Gujarati, D.N. (2004), Basic Econometrics (4th ed.), The McGraw-Hill Companies, Avenue of The Americas, New York.
  • Hillman, A.J., C. Shropshire, A. A. Cannella (2007), “Organizational Predictors of Women on Corporate Boards”, Academy of Management Journal, 50(4), 941-952.
  • Işık, O., A.R. İnce (2016), “Board Size, Board Composition and Performance: An Investigation on Turkish Banks”, International Business Research, 9(2), 74.
  • James, J.B., C. Joseph (2015), “Corporate Governance Mechanisms and Bank Performance: Resource-Based View”, Procedia Economics and Finance, 31, 117-123.
  • John, K., L.W. Senbet (1998), “Corporate Governance and Board Effectiveness”, Journal of Banking & Finance, 22(4), 371-403.
  • Kılıç, M. (2015), “The Effect of Board Diversity on the Performance of Banks: Evidence From Turkey”. International Journal of Business and Management, 10(9), 182.
  • Levin, A., C.F. Lin, C.S.J. Chu (2002), “Unit Root Tests in Panel Data: Asymptotic and Finite-Sample Properties”, Journal of Econometrics, 108(1), 1-24.
  • Mallin, C., H., Farag, K. Ow-Yong (2014), “Corporate Social Responsibility and Financial Performance in Islamic Banks”, Journal of Economic Behavior & Organization, 103, 21-38.
  • Milliken, F.J., L.L. Martins (1996), “Searching for Common Threads: Understanding the Multiple Effects of Diversity in Organizational Groups”, Academy of Management Review, 21(2), 402-433.
  • Ocak, M. (2013), “Yönetim Kurulu ve Üst Yönetimde Yer Alan Kadınların Finansal Performansa Etkisi: Türkiye'ye İlişkin Bulgular”, Muhasebe ve Finansman Dergisi, 60, 107-126.
  • OECD (2016), G20/OECD Principles of Corporate Governance (Turkish Version), Paris: OECD Publishing.
  • Pathan, S., R. Faff (2013), “Does Board Structure in Banks Really Affect Their Performance?”, Journal of Banking & Finance, 37(5), 1573-1589.
  • Pfeffer, J. (1972), “Size and Composition of Corporate Boards of Directors: The Organization and its Environment”, Administrative Science Quarterly, 218-228.
  • Wachudi, E.J., J. Mboya (2012), “Effect of Board Gender Diversity on The Performance of Commercial Banks in Kenya”, European Scientific Journal, ESJ, 8(7).
  • Yağlı, I., B. Şi̇mşek, (2017). “Meta-Analytic Review of the Relation Between Board Globalization and Firm Performance”. Financial Studies, 21(2), 31-55.
  • Young, M.N., M.W. Peng, D. Ahlstrom, G.D. Bruton, Y. Jiang (2008), “Corporate Governance in Emerging Economies: A Review of the Principal–Principal Perspective”, Journal of Management Studies, 45(1), 196-220.

YÖNETİM KURULU ÇEŞİTLİLİĞİ -FİNANSAL PERFORMANS İLİŞKİSİ: TÜRK BANKACILIK SEKTÖRÜ ÖRNEĞİ

Year 2019, Volume: 37 Issue: 3, 565 - 586, 26.09.2019
https://doi.org/10.17065/huniibf.450543

Abstract

Son finansal kriz, çeşitli kurumsal yönetim mekanizmaları ile firma performansı arasındaki ilişkilerin analizine yönelik ilgiyi artırmıştır. Bununla birlikte, çok az akademik çalışmada bu ilişki bankacılık sektörü için ele alınmıştır. Mevcut çalışma, küresel finans krizi sonrası dönemde (2009-2016), Türk bankalarının yönetim kurulu yapısındaki değişimi ortaya çıkarmayı ve yönetim kurulu çeşitliğinin banka performansı üzerinde etkili olup olmadığını tespit etmeyi amaçlamaktadır. Bu amaç doğrultusunda, banka performansının ölçümünde ortalama aktif karlılık (ROAA), ortalama özkaynak karlılığı (ROAE) ile vergi öncesi kar/toplam aktifler oranları kullanılırken, yönetim kurulu yapısı ile ilgili olarak büyüklük, cinsiyet, uyruk, eğitim seviyesi ile bağımsız olup olmama kriterleri dikkate alınmıştır. Bulgular, yönetim kurulu büyüklüğü ile banka performansı arasında negatif ve istatistiksel olarak anlamlı bir ilişki olduğunu ortaya çıkarmıştır. Bununla birlikte, kadın üyelerin oranı ve lisansüstü eğitim seviyesine sahip üyeler ile banka performansı arasında pozitif ilişki olduğu tespit edilmiştir. Ancak bu ilişkilerden, kadın üyelerin oranı ile özsermaye karlılığı arasındaki ilişki ile lisansüstü eğitim seviyesine sahip üyelerin oranı ile vergi öncesi kar/toplam aktifler oranı arasındaki ilişkiler istatistiksel olarak anlamlıdır. Öte yandan, banka performansı ile yabancı üyelerin oranı ve bağımsız üyelerin oranı arasında negatif bir ilişki tespit edilmiştir. Fakat bu ilişkilerden de sadece kadın üyelerin oranı ile özkaynak karlılığı arasındaki ilişki istatistiksel olarak anlamlıdır. 

References

  • Adams, R.B., H. Mehran (2012), “Bank Board Structure and Performance: Evidence For Large Bank Holding Companies”, Journal of Financial Intermediation, 21(2), 243-267.
  • Aygün, M., A. Taşdemir, E. Çavdar, (2010), “Banka Performansı Üzerinde Yönetim Kurulu Büyüklüğünün Etkisi”, Atatürk Üniversitesi İktisadi ve İdari Bilimler Dergisi, 24(3).
  • BCBS (2010), Principles for Enhancing Corporate Governance, Basel Committee on Banking Supervision, BIS, Basel.
  • BCBS, (2006), International Convergence of Capital Measurement and Capital Standards: A Revised Framework. Basel Committee on Banking Supervision, BIS, Basel.
  • Bhagat, S., B. Bolton, A. Subramanian (2010), “CEO Education, CEO Turnover, and Firm Performance”. Working Paper, University of Colorado at Boulder, 3 August.
  • Campbell, K., A. Mínguez-Vera (2008), “Gender Diversity in the Boardroom and Firm Financial Performance. Journal of Business Ethics, 83(3), 435-451.
  • Caprio, G., R. Levine, (2002), “Corporate Governance in Finance: Concepts and International Observations”, Financial Sector Governance: The Roles of The Public and Private Sectors, 17-50.
  • Carter, D.A., B.J., Simkins, W.G. Simpson, (2003), “Corporate Governance, Board Diversity, and Firm Value”. Financial Review, 38(1), 33-53.
  • Chiaramonte, L., B. Casu (2013), “The Determinants of Bank CDS Spreads: Evidence from the Financial Crisis”, The European Journal of Finance, 19(9), 861-887.
  • Darmadi, S. (2013), “Board Members' Education and Firm Performance: Evidence from a Developing Economy”, International Journal of Commerce and Management, 23(2), 113-135.
  • De Andres, P., E. Vallelado (2008), “Corporate Governance in Banking: The Role of The Board of Directors, Journal of Banking & Finance, 32(12), 2570-2580.
  • Doğan, M., F. Yıldız (2013), “The Impact of The Board of Directors’ Size on The Bank’s Performance: Evidence From Turkey”, European Journal of Business and Management, 5(6), 130-140.
  • Doğan, M., Y. Topal (2016), “Yönetim Kurulundaki Yabancı Üye Sayısının ve Yabancı Sahipliğinin Finansal Performans Üzerindeki Etkisi” Ege Academic Review, 16(1).
  • Fama, E.F., Jensen, M.C. (1983), “Separation of Ownership and Control”, The Journal of Law and Economics, 26(2), 301-325.
  • Georgantopoulos, A.G., I. Filos (2017), “Board Structure and Bank Performance: Evidence for the Greek Banking Industry During Crisis Period” International Journal of Economics and Financial Issues, 7(1), 56-67.
  • Gujarati, D.N. (2004), Basic Econometrics (4th ed.), The McGraw-Hill Companies, Avenue of The Americas, New York.
  • Hillman, A.J., C. Shropshire, A. A. Cannella (2007), “Organizational Predictors of Women on Corporate Boards”, Academy of Management Journal, 50(4), 941-952.
  • Işık, O., A.R. İnce (2016), “Board Size, Board Composition and Performance: An Investigation on Turkish Banks”, International Business Research, 9(2), 74.
  • James, J.B., C. Joseph (2015), “Corporate Governance Mechanisms and Bank Performance: Resource-Based View”, Procedia Economics and Finance, 31, 117-123.
  • John, K., L.W. Senbet (1998), “Corporate Governance and Board Effectiveness”, Journal of Banking & Finance, 22(4), 371-403.
  • Kılıç, M. (2015), “The Effect of Board Diversity on the Performance of Banks: Evidence From Turkey”. International Journal of Business and Management, 10(9), 182.
  • Levin, A., C.F. Lin, C.S.J. Chu (2002), “Unit Root Tests in Panel Data: Asymptotic and Finite-Sample Properties”, Journal of Econometrics, 108(1), 1-24.
  • Mallin, C., H., Farag, K. Ow-Yong (2014), “Corporate Social Responsibility and Financial Performance in Islamic Banks”, Journal of Economic Behavior & Organization, 103, 21-38.
  • Milliken, F.J., L.L. Martins (1996), “Searching for Common Threads: Understanding the Multiple Effects of Diversity in Organizational Groups”, Academy of Management Review, 21(2), 402-433.
  • Ocak, M. (2013), “Yönetim Kurulu ve Üst Yönetimde Yer Alan Kadınların Finansal Performansa Etkisi: Türkiye'ye İlişkin Bulgular”, Muhasebe ve Finansman Dergisi, 60, 107-126.
  • OECD (2016), G20/OECD Principles of Corporate Governance (Turkish Version), Paris: OECD Publishing.
  • Pathan, S., R. Faff (2013), “Does Board Structure in Banks Really Affect Their Performance?”, Journal of Banking & Finance, 37(5), 1573-1589.
  • Pfeffer, J. (1972), “Size and Composition of Corporate Boards of Directors: The Organization and its Environment”, Administrative Science Quarterly, 218-228.
  • Wachudi, E.J., J. Mboya (2012), “Effect of Board Gender Diversity on The Performance of Commercial Banks in Kenya”, European Scientific Journal, ESJ, 8(7).
  • Yağlı, I., B. Şi̇mşek, (2017). “Meta-Analytic Review of the Relation Between Board Globalization and Firm Performance”. Financial Studies, 21(2), 31-55.
  • Young, M.N., M.W. Peng, D. Ahlstrom, G.D. Bruton, Y. Jiang (2008), “Corporate Governance in Emerging Economies: A Review of the Principal–Principal Perspective”, Journal of Management Studies, 45(1), 196-220.
There are 31 citations in total.

Details

Primary Language Turkish
Journal Section Articles
Authors

İbrahim Yağlı 0000-0001-8985-0172

Publication Date September 26, 2019
Submission Date August 3, 2018
Published in Issue Year 2019 Volume: 37 Issue: 3

Cite

APA Yağlı, İ. (2019). YÖNETİM KURULU ÇEŞİTLİLİĞİ -FİNANSAL PERFORMANS İLİŞKİSİ: TÜRK BANKACILIK SEKTÖRÜ ÖRNEĞİ. Hacettepe Üniversitesi İktisadi Ve İdari Bilimler Fakültesi Dergisi, 37(3), 565-586. https://doi.org/10.17065/huniibf.450543
AMA Yağlı İ. YÖNETİM KURULU ÇEŞİTLİLİĞİ -FİNANSAL PERFORMANS İLİŞKİSİ: TÜRK BANKACILIK SEKTÖRÜ ÖRNEĞİ. Hacettepe Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi. September 2019;37(3):565-586. doi:10.17065/huniibf.450543
Chicago Yağlı, İbrahim. “YÖNETİM KURULU ÇEŞİTLİLİĞİ -FİNANSAL PERFORMANS İLİŞKİSİ: TÜRK BANKACILIK SEKTÖRÜ ÖRNEĞİ”. Hacettepe Üniversitesi İktisadi Ve İdari Bilimler Fakültesi Dergisi 37, no. 3 (September 2019): 565-86. https://doi.org/10.17065/huniibf.450543.
EndNote Yağlı İ (September 1, 2019) YÖNETİM KURULU ÇEŞİTLİLİĞİ -FİNANSAL PERFORMANS İLİŞKİSİ: TÜRK BANKACILIK SEKTÖRÜ ÖRNEĞİ. Hacettepe Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi 37 3 565–586.
IEEE İ. Yağlı, “YÖNETİM KURULU ÇEŞİTLİLİĞİ -FİNANSAL PERFORMANS İLİŞKİSİ: TÜRK BANKACILIK SEKTÖRÜ ÖRNEĞİ”, Hacettepe Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, vol. 37, no. 3, pp. 565–586, 2019, doi: 10.17065/huniibf.450543.
ISNAD Yağlı, İbrahim. “YÖNETİM KURULU ÇEŞİTLİLİĞİ -FİNANSAL PERFORMANS İLİŞKİSİ: TÜRK BANKACILIK SEKTÖRÜ ÖRNEĞİ”. Hacettepe Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi 37/3 (September 2019), 565-586. https://doi.org/10.17065/huniibf.450543.
JAMA Yağlı İ. YÖNETİM KURULU ÇEŞİTLİLİĞİ -FİNANSAL PERFORMANS İLİŞKİSİ: TÜRK BANKACILIK SEKTÖRÜ ÖRNEĞİ. Hacettepe Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi. 2019;37:565–586.
MLA Yağlı, İbrahim. “YÖNETİM KURULU ÇEŞİTLİLİĞİ -FİNANSAL PERFORMANS İLİŞKİSİ: TÜRK BANKACILIK SEKTÖRÜ ÖRNEĞİ”. Hacettepe Üniversitesi İktisadi Ve İdari Bilimler Fakültesi Dergisi, vol. 37, no. 3, 2019, pp. 565-86, doi:10.17065/huniibf.450543.
Vancouver Yağlı İ. YÖNETİM KURULU ÇEŞİTLİLİĞİ -FİNANSAL PERFORMANS İLİŞKİSİ: TÜRK BANKACILIK SEKTÖRÜ ÖRNEĞİ. Hacettepe Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi. 2019;37(3):565-86.

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