<abstract xmlns="http://www.w3.org/1999/xhtml"><p>A bank, particularly in developing countries like Turkey, is one of the most important institutions in the financial sector. Therefore knowing the factors affecting the performance of banks is important for the development of the sector. One of the factors affecting the risk and profitability of banking sector is the internal factors of the banks. The aim of this paper is to investigate the board of directors’ characteristics and its effect on risk level measured by non-performing loans and on bank performance measured by asset profitability using the Generalized Method of Moments (GMM) estimator. Data from nineteen deposit banks for the period 2012–2018 were used. The result of the study determined that the board size, foreign board members and the independent board members have an effect on both non-performing loans and the return on assets.</p></abstract>

A bank, particularly in developing countries like Turkey, is one of the most important institutions in the financial sector. Therefore knowing the factors affecting the performance of banks is important for the development of the sector. One of the factors affecting the risk and profitability of banking sector is the internal factors of the banks. The aim of this paper is to investigate the board of directors’ characteristics and its effect on risk level measured by non-performing loans and on bank performance measured by asset profitability using the Generalized Method of Moments (GMM) estimator. Data from nineteen deposit banks for the period 2012–2018 were used. The result of the study determined that the board size, foreign board members and the independent board members have an effect on both non-performing loans and the return on assets.

The effect of board of directors characteristics on risk and bank performance: Evidence from Turkey

Faculty of Economics and Administrative Sciences, Department of Business Administration

Economics and Business Review

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

A bank, particularly in developing countries like Turkey, is one of the most important institutions in the financial sector. Therefore knowing the factors...

The effect of board of directors characteristics on risk and bank performance: Evidence from Turkey

Published Online: Aug 24, 2020

Page range: 88 - 104

Received: Dec 04, 2019

Accepted: Jul 27, 2020

DOI: https://doi.org/10.18559/ebr.2020.3.5

Keywords
corporate governance, bank performance, non-performing loans

© 2020 Berna Doğan et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

The effect of board of directors characteristics on risk and bank performance: Evidence from Turkey

Published Online: Aug 24, 2020

Page range: 88 - 104

Received: Dec 04, 2019

Accepted: Jul 27, 2020

DOI: https://doi.org/10.18559/ebr.2020.3.5

Keywordscorporate governance, bank performance, non-performing loans

© 2020 Berna Doğan et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Keywords
corporate governance, bank performance, non-performing loans