Purpose

The purpose of this study is to examine the relationship of the board and risk committee in respect of risk-taking in conventional and Islamic banks in Malaysia.

Design/methodology/approach

This study uses unbalanced panel data for 15 conventional and 14 Islamic banks over the period 2007–2016. The generalised least squares random effects technique is applied.

Findings

The evidence shows that independent directors and frequency of board meetings reduce risk-taking but that the number of directors with finance and banking experience and those with multiple directorships tend to increase risk-taking. The findings also indicate that the size of the risk committee, the number of directors on the risk committee and the appointment of a designated risk officer tends to reduce risk-taking in banks. By comparing conventional and Islamic banks, the findings show that Islamic banks have lower exposure to portfolio risk but higher insolvency risk.

Practical implications

The findings in this study suggest that the board and risk committee have an impact on bank risk-taking. The implications for management include having more independent directors, fewer directors with multiple board memberships and having an efficient risk committee in order to reduce risks. Regulators should look into the issue of multiple directorships as this is positively related to risk-taking. Islamic banks should expand their operations as our findings indicate that bigger banks are better able to manage risk.

Originality/value

This study covers bank governance and risk committee, which are crucial in influencing the risk-taking behaviour of conventional and Islamic banks.

中文翻译：

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传统和伊斯兰银行的治理和冒险

目的

这项研究的目的是研究马来西亚传统银行和伊斯兰银行在风险承担方面董事会与风险委员会之间的关系。

设计/方法/方法

这项研究使用了2007-2016年间15家传统银行和14家伊斯兰银行的不平衡面板数据。应用了广义最小二乘随机效应技术。

发现

有证据表明，独立董事和董事会会议的频度会降低冒险精神，但具有财务和银行经验的董事人数以及具有多个董事职位的董事人数往往会增加冒险精神。调查结果还表明，风险委员会的规模，风险委员会董事的人数以及指定风险官员的任命都倾向于减少银行承担风险的风险。通过比较传统银行和回教银行，调查结果显示回教银行面临的投资组合风险较低，但破产风险较高。

实际影响

这项研究的结果表明，董事会和风险委员会对银行承担风险具有影响。对管理层的影响包括拥有更多的独立董事，拥有多个董事会成员的更少的董事以及一个有效的风险委员会以降低风险。监管者应研究多个董事职位的问题，因为这与冒险活动正相关。回教银行应扩大经营范围，因为我们的调查结果表明，较大的银行更有能力管理风险。

创意/价值

这项研究涵盖了银行治理和风险委员会，这对于影响传统银行和伊斯兰银行的冒险行为至关重要。