The Effect of Board Size and Composition on the Efficiency of UK Banks |
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| Authors: | Sailesh Tanna Fotios Pasiouras |
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| Institution: | 1. Department of Economics, Finance &2. Accounting , Coventry Business School, Coventry University , Priory Street, Coventry, CV1 5FB, UK;3. Financial Engineering Laboratory, Department of Production Engineering and Management , Technical University of Crete, Chania, 73100, Greece and Visiting Fellow, Centre for Governance &4. Regulation, University of Bath School of Management , Bath BA2 7AY, UK |
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| Abstract: | We examine a sample of 17 banking institutions operating in the UK between 2001 and 2006 to provide empirical evidence on the association between the efficiency of UK banks and board structure, namely board size and composition. Our approach is to use data envelopment analysis to estimate several measures of the efficiency of banks, and then to use panel data regressions for investigating the impact of board structure on efficiency. After controlling for bank size and capital strength, we find some evidence of a positive association between board size and efficiency, although this is not robust across all our specifications. Board composition, by contrast, has a robustly significant and positive impact on all measures of efficiency. |
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| Keywords: | Board Size Board Composition Banks Corporate Governance Efficiency Non-Executives |
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