Does the education level of board members affect the bank’s performance? Evidence from US banks

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Abstact

The scientific literature on banks’ corporate governance has considered multiple characteristics of the board of directors to try to understand its effects in terms of banking performance; however, there is a gap in the literature on the effects of the quality of education of board members on the banks’ performance. Indeed, there is no consensus in the literature that human capital resources can predict risk-taking or bank performance. This study seeks to reduce this gap by examining for the period 2000–2021 the impact of the quality of the education background of board members on the performance of a group of large US banks. The results of this empirical investigation may offer relevant policy implications. The Federal Reserve System may consider adopting stricter measures than those currently imposed to control the behavior of the bank’s board members and reduce agency problems.

Keywords: Banking Sector, Board of Directors, Bank Performance, Corporate Governance, Financial Education

JEL Classification: G21, G28, G34

Received: 15.10.2022
Accepted: 25.10.2022

How to cite: Capuano, P. (2023). Does the education level of board members affect the bank’s performance? Evidence from US banks. In E. Karger & A. Kostyuk (Eds.), Corporate governance: An interdisciplinary outlook (pp. 27–29). Virtus Interpress. https://doi.org/10.22495/cgaiop5