How boards can improve bank performance

Indian public sector banks remain in a slump. Researchers Rekha Misra and Anwesha Das find that better corporate governance can increase bank profits and boost investor confidence. They compare the status of corporate governance in Indian banks across both public and private sectors by calculating a board composition index for banks. They also find a greater variation in index scores among public sector banks compared to private sector banks, suggesting that even with banks with similar ownership structures there can be significant variation in governance structures. They thus conclude that the establishment of the Banks Board Bureau in 2016 to improve corporate governance was an important step for the banking sector.