University of Twente Student Theses
The impact of board diversity on bank’s risk taking in Europe
Werven, C. van (2017) The impact of board diversity on bank’s risk taking in Europe.
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| Abstract: | The aim of this paper is to find the effect of board characteristics in terms of board diversity in gender, age, and ethnicity. Literature examined in this paper suggests a positive relation between these variables and policies to secure for risk. The measurements for the level of risk are in accounting standards Total capital ratio, and Tier-1 capital ratio and for risk in market-based standards the Z-score. This is examined through the conduction of a multiple regression analysis for the separate board characteristics being tested. The control variables are the total amount of board members, total assets, and return on assets. This study is performed on European banks in the year 2015. The results show that female diversity is positive related to the assurance against risk by providing more reserves, but does not reduce insolvency risk. Average age is not significant related to risk policies in the form of assurance or insolvency risk in this study. Ethnic diversity measured as board members from other countries than the banks head office show a positive relation on the secure risk policies and insolvency risk. These results suggest that a difference in personal characteristics, through culture difference and gender difference has a positive effect towards secure risk policies. |
| Item Type: | Essay (Bachelor) |
| Clients: | 1995, Nederland |
| Faculty: | BMS: Behavioural, Management and Social Sciences |
| Subject: | 85 business administration, organizational science |
| Programme: | International Business Administration BSc (50952) |
| Link to this item: | https://purl.utwente.nl/essays/72734 |
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