A non-parametric synthesis measure for board quality: empirical evidence from Indian banks

IF 4.5 Q1 MANAGEMENT Benchmarking-An International Journal Pub Date : 2023-05-19 DOI:10.1108/bij-10-2022-0663
R. Singh, S. Sharma
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Abstract

PurposeThe paper aims to craft a non-parametric composite value for the board quality of Indian banks where the weights can be assigned endogenously.Design/methodology/approachThe study employed a non-parametric data envelopment analysis (DEA)-based novel extension known as the benefit of doubt approach. To measure the strength of the Indian bank corporate board in terms of board efficiency (BEF), the study used a mixed approach, i.e. first, the study calculates the percentile ranks of the five attributes that the study assumes are the characteristics of the strong board including board size, number of outside directors, frequency of meetings, non-duality leadership and board gender diversity. Thereafter, the study performs the benefit-to-doubt approach to finally measure the efficiency of the board.FindingsThe findings of the study establish that the methodological framework present in the study to measure the strength of the board in terms of BEF has been a much superior method over the other weighted and non-weighted linear average methods.Practical implicationsThis methodology aids the shareholders, investors and regulatory bodies in rating the Indian banks based on their strength in terms of better monitoring boards and ensuring a smooth agent–owner relationship.Originality/valueThe benefit of doubt approach has been a unique and novel methodology to craft the composite value for any multidimensional phenomenon. One of the major benefits of using this approach is that it assigns the weights endogenously to each dimension and thereafter collectively determines the efficiency of such a phenomenon.
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董事会质量的非参数综合度量:来自印度银行的经验证据
本文旨在为印度银行董事会质量制作一个非参数复合值,其中权重可以内源性分配。设计/方法/方法本研究采用了一种基于非参数数据包络分析(DEA)的新颖扩展,称为怀疑的益处方法。为了衡量印度银行公司董事会在董事会效率(BEF)方面的实力,该研究采用了混合方法,即首先,该研究计算了研究假设的强大董事会特征的五个属性的百分位数排名,包括董事会规模、外部董事数量、会议频率、非二元领导和董事会性别多样性。随后,本研究采用非怀疑法来最终衡量董事会的效率。研究结果研究结果表明,研究中提出的方法框架,以BEF来衡量板的强度,比其他加权和非加权线性平均方法优越得多。该方法有助于股东、投资者和监管机构根据印度银行在更好地监督董事会和确保顺利的代理-所有者关系方面的实力对其进行评级。“怀疑的好处”方法是一种独特而新颖的方法,可以为任何多维现象制作复合价值。使用这种方法的主要好处之一是,它为每个维度内生地分配权重,然后共同确定这种现象的效率。
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来源期刊
CiteScore
10.40
自引率
16.10%
发文量
154
期刊介绍: Benchmarking is big news for companies committed to total quality programmes. Its enthusiastic reception by many prominent business figures has created high levels of interest in a technique which promises big rewards for co-operating partners. Yet, like total quality itself, it must be understood in its proper context, and implemented single mindedly if it is to be effective - this journal helps companies to decide if benchmarking is right for them, and shows them how to go about it successfully.
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