Bank efficiency in the African banking sector: Does board independence matter?

This study examines the relationship between board independence and bank efficiency. Using a sample of 78 commercial banks operating in the African region from 2016 to 2019, the findings reveal that board independence significantly enhances technical efficiency, as measured by data envelopment analysis (DEA). Additionally, chief executive officer (CEO) duality, gender diversity on boards, and the presence of committees positively influence bank efficiency. The results also highlight the role of bank capitalization in improving overall bank efficiency. These findings suggest that adopting good governance mechanisms, such as increasing the number of independent administrators, female board members, and board committees, plays a crucial role in boosting bank efficiency.

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Publication Details

Journal
Corporate Board role duties and composition
Published
2024-08-15
DOI
https://doi.org/10.22495/cbv20i2art6
Citations
3
Primary Topic
Banking stability, regulation, efficiency
Type
article
Field-Weighted Citation Impact
1.62
Controls
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article

Bank efficiency in the African banking sector: Does board independence matter?

Badr Habba, Sofia Benjakik
3 citations
Corporate Board role duties and composition
Banking stability, regulation, efficiency
1.62
article

Bank efficiency in the African banking sector: Does board independence matter?

Badr Habba, Sofia Benjakik
article en
3 citations

Abstract

This study examines the relationship between board independence and bank efficiency. Using a sample of 78 commercial banks operating in the African region from 2016 to 2019, the findings reveal that board independence significantly enhances technical efficiency, as measured by data envelopment analysis (DEA). Additionally, chief executive officer (CEO) duality, gender diversity on boards, and the presence of committees positively influence bank efficiency. The results also highlight the role of bank capitalization in improving overall bank efficiency. These findings suggest that adopting good governance mechanisms, such as increasing the number of independent administrators, female board members, and board committees, plays a crucial role in boosting bank efficiency.

Corporate Board role duties and compositionVol. 20(2)
Cadi Ayyad University (MA)
Gender equality
Openalex Percentile: Top 16%
Banking stability, regulation, efficiency
1.62
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