Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/168589
Authors: 
Kick, Thomas
Nehring, Inge
Schertler, Andrea
Year of Publication: 
2017
Series/Report no.: 
Discussion Paper, Deutsche Bundesbank 27/2017
Abstract: 
Banks in bad financial shape are more likely to appoint executive directors from the outside than those in good shape. It is, however, not clear whether all of these appointments necessarily lead to the desired turnaround. We analyze the performance effects of new board members with external boardroom experience (outsiders) by distinguishing between good and bad managerial abilities of executives based on either ROA or risk-return effciency of their previous employers. Our results show that banks appointing bad outsiders underperform other banks while those appointing good outsiders do so to a lesser extent. The performance differentials are highly pronounced in high-risk banks and in the post-crisis period.
Subjects: 
executive directors
outside appointments
bank performance
managerial ability
JEL: 
G21
G32
G34
C23
ISBN: 
978-3-95729-393-0
Document Type: 
Working Paper

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