Risk governance of financial institutions: The effect of ownership structure and board independence
Publication typeArticle in academic journal
JournalFinance Research Letters
Publication Begin page227
Publication End page237
MetadataShow full item record
AbstractThis paper investigates how the risk governance practices of European financial institutions quantitatively cluster on the corporate governance characteristics of the corporation, particularly ownership structure and board independence. Using hand-collected data on a sample of 54 banks and 33 insurance companies, we find that financial institutions with powerful owners (i.e., those with >20% ownership) have a lower chief risk officer (CRO) presence and lower risk committee presence. In addition, state-controlled institutions and institutions with more independent boards have more independent risk committees.