Board, ownership and performance of banks with a dual board system: Evidence from Taiwan

The influence of corporate governance on a firm's performance has recently been studied in industrial enterprises in developed countries, but not in services such as banks with a dual board system in Asia's newly-industrialized economies (NIEs). This research examines the effects of board structure and ownership on a bank's performance using a sample of 41 commercial banks in an Asian NIE (Taiwan). Results showed that board size, numbers of outside directors, and family-owned shares are positively associated with bank performance, whereas the number of supervisory directors has a negative influence on performance. The findings provide empirical support for corporate governance, which improves the performance of banks with a dual board system in Taiwan.