Abstract:
The study investigates the impact of CEO Duality, CG (corporate governance) and
RG (risk governance) mechanisms on the systemic risk along with investigating the
moderating role of CG and RG on the relationship between CEO power and systemic
risk by using a sample of 88 large listed commercial banks from 11 Asian countries
namely Pakistan, China, India, Bangladesh, Bahrain, Jordan, Philippines, Saudi
Arabia, Turkey, Thailand and UAE. The study utilizes OLS (ordinary least square),
random effect and fixed effect models and evidences the negative influence of CEO
Power, CG and RG mechanisms on the systemic risk, only a few positively
influencing the systemic risk such as CRO Presence and RMC (Risk management
Committee) meetings. The findings show that a few CG and RG mechanisms
significantly moderate the relationship between CEO power and systemic risk such as
board size, RMC meetings, CRO (chief risk officer) presence.
The influence of CEO power, CG and RG mechanisms is also investigated using the
GMM approach to tackle endogeneity issues. The results of OLS, random effect,
fixed effect are consistent with the GMM. Moreover, the moderation results of CG
and RG mechanisms on the relationship between CEO power and systemic risk are
also improved. CG mechanisms board size, board independence and board meetings
significantly moderate the relationship between CEO power and systemic risk. RG
mechanisms RMC presence, RMC size, CRO presence and CRO independence also
significantly moderate the relationship between CEO power and systemic risk.
