Abstract
This study systematically investigates the impact of board structure on forced bank CEO turnovers. Using a sample of 149 bank CEO turnovers, I show that forced CEO turnover is motivated more by high risk level than by poor performance, suggesting that bank directors place “safety and soundness” before profitability. This study is the first to document that occupational background of independent directors can have a significant impact on forced bank CEO turnovers. In contrast with previous studies, I do not find any significant correlation between board independence ratio and the probability of forced bank CEO turnover, or changes in post-turnover performance.
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