The Linkage between Board Busyness and Operating Performance on Banking Industry

• Main Authors: CHEN, SHIH-HSUAN, 陳世炫
• Other Authors: Chang Yuan
• Format: Others
• Language: zh-TW
• Online Access: http://ndltd.ncl.edu.tw/handle/13618508272400438905

碩士 === 國立彰化師範大學 === 財務金融技術學系 === 103 === Based on data of public-banks of Taiwan through 2006~2013, this master thesis examines the linkage between the degree of board busyness and operating performance of banks. Existing studies have mentioned that main functions of a board are managerial advising and managerial monitoring, if a board member also serves as a director of other companies, the reputation, management knowledge and experience as well as tangible/intangible resources are accumulated, so he/she could provide better advise to the management and uncover wrong management decisions, then in turns has positive impact on operating performance. On the other hand, if a company’s directors have multiple directorships, the effort and commitment on board function of a specific company are diluted, which has negative impact on performance. This thesis employs four indicators for board busyness, the first, total number of directorship of the board, second, total number of directorship divided by the total number of directors, third, dichotomous measure of whether a board’s total number of directorship is larger than the average number of directorship on all companies, fourth, the average attendance rate on board meeting. Bank’s performance indicators are 12 indicators under CAMELS ratings system (capital adequacy, asset quality, management ability, profitability, liquidity risks and market-risk sensitivity). Through correlation analysis and multiple regression analysis, the evidence shows that greater degree of board busyness is associated with better performance on five of six dimensions of CAMELS, namely, capital adequacy, assets quality, management, earnings ability and liquidity risk. Therefore, the empirical result supports the view that board busyness helps to improve bank’s operating performance.