Mediating Risk Taking on Relationship between Board Structure Determinants and Banks Financial Performance

  •  Fazel Mohammadi Nodeh    
  •  Melati Ahmad Anuar    
  •  Suresh Ramakrishnan    
  •  Ali Akbar Rafatnia    
  •  Adel Mohammadi Nodeh    


This study examines the relevance of bank board structure determinants (board independence, board size and concentrated ownership) on financial performance and level risk taking. In addition, the role of risk taking investigated as mediator variable on relationship between these variables and financial performance. This research contributes to the empirical research, Using a sample of 37 Malaysian Islamic and conventional banks over 2005-2014. In This study, The relationship between board structure determinants with level of risk taking and financial performance tested by pooled ordinary least square (OLS), fixed effects model, and generalized method of moments (GMM), however the role of risk taking as mediator variable examined by Baron and Kenny approach and Sobel test. The results shows that board structure have positive and negative relationship with financial performance and level of risk taking respectively. Furthermore, the relationship between board independence and concentrated ownership with financial performance mediate by risk taking.

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