The impact of the power of the board of management and the executive director on the performance of commercial banks listed on the Vietnam stock market (period 2012 - 2021)

Abstract

Using banks listed on the Vietnamese stock market, this study looks at the relationship between CEO power, board power, and bank performance from 2012 to 2021. The findings demonstrate that the CEO's power affects bank performance. Through ROA measurement, CEO ownership lowers bank performance, but it also lowers the bad debt ratio. The CEO's tenure and high educational attainment contribute to the efficiency and risk reduction of the banking industry. The presented findings employ the GMM method to manage the endogeneity issue in the study model, and they vary in how performance metrics based on ROA, ROE, Z-score, and bad debt ratio are used. Additionally, using the foreign ownership ratio and independent board ratio, the study looks at the relationship between CEO power, board power, and bank performance. This allows the study to demonstrate that board of directors and CEO power are two elements that affect how well banking operations work.