Executive board composition and risk taking

A.N. Berger, T. Kick, K. Schaeck

Research output: Contribution to journalArticleScientificpeer-review

Abstract

Little is known about how the demographic characteristics of executive teams affect corporate governance in banking. Exploiting a unique dataset, we investigate how age, gender, and educational composition of executive teams affect the portfolio risk of financial institutions. Using difference-in-difference estimations that focus exclusively on mandatory executive retirements for the entire population of German bank executive officers, we demonstrate that younger executive teams increase portfolio risk, as do board changes that result in a higher proportion of female executives, although this latter effect is weaker in terms of both statistical and economic significance. In contrast, when board changes increase the representation of executives holding Ph.D. degrees, portfolio risk declines.
Original languageEnglish
Pages (from-to)48-65
JournalJournal of Corporate Finance
Volume28
Early online date13 Nov 2013
DOIs
Publication statusPublished - Oct 2014

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Risk taking
Board composition
Portfolio risk
Economic significance
Corporate governance
Education
Difference-in-differences
Retirement
Financial institutions
Banking
Statistical significance
Proportion
Demographic characteristics

Keywords

  • bank
  • executives
  • portfolio risk
  • age
  • gender
  • education

Cite this

Berger, A.N. ; Kick, T. ; Schaeck, K. / Executive board composition and risk taking. In: Journal of Corporate Finance. 2014 ; Vol. 28. pp. 48-65.
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Executive board composition and risk taking. / Berger, A.N.; Kick, T.; Schaeck, K.

In: Journal of Corporate Finance, Vol. 28, 10.2014, p. 48-65.

Research output: Contribution to journalArticleScientificpeer-review

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