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Age diversity and the monitoring role of corporate boards : evidence from banks
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Janahi, Mohamed, Millo, Yuval and Voulgaris, Georgios (2023) Age diversity and the monitoring role of corporate boards : evidence from banks. Human Relations, 76 (10). pp. 1599-1633. doi:10.1177/00187267221108729 ISSN 0018-7267.
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Official URL: https://doi.org/10.1177/00187267221108729
Abstract
We investigate how age diversity on corporate boards affects their monitoring performance. Despite the critical importance of the monitoring function of the board, previous studies focus mainly on the advisory role of age-diversified boards. Our emphasis is on banks where the opacity in their complex operations poses a challenge for external stakeholders to assess performance and thus they heavily rely on the board for monitoring managerial activities. We examine how age diversity affects one of the primary monitoring roles of corporate boards – a responsibility over the provision of high-quality financial reports. Using a large panel data of banks in the United States (n=7 005) our findings suggest that age-diversified boards are associated with less earnings management, indicative of higher quality reporting. Our results still hold for different indicators of the monitoring performance of the board in other areas, such as loan risk. Further analysis reveals that, as age diversity increases, the strength of the board’s monitoring effectiveness also increases. Overall, our findings suggest that age-diversified boards are more effective at monitoring managerial decision-making.
Item Type: | Journal Article | ||||||
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Subjects: | H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management H Social Sciences > HF Commerce H Social Sciences > HG Finance |
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Divisions: | Faculty of Social Sciences > Warwick Business School > Accounting Faculty of Social Sciences > Warwick Business School |
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SWORD Depositor: | Library Publications Router | ||||||
Library of Congress Subject Headings (LCSH): | Boards of directors, Age and employment, Diversity in the workplace, Corporate governance, Banks and banking -- Employees, Social responsibility of business | ||||||
Journal or Publication Title: | Human Relations | ||||||
Publisher: | Sage Publications Ltd. | ||||||
ISSN: | 0018-7267 | ||||||
Official Date: | October 2023 | ||||||
Dates: |
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Volume: | 76 | ||||||
Number: | 10 | ||||||
Page Range: | pp. 1599-1633 | ||||||
DOI: | 10.1177/00187267221108729 | ||||||
Status: | Peer Reviewed | ||||||
Publication Status: | Published | ||||||
Access rights to Published version: | Open Access (Creative Commons) | ||||||
Date of first compliant deposit: | 15 August 2022 | ||||||
Date of first compliant Open Access: | 24 August 2022 |
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