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CEO Power and Tenure on Bank Risk-Taking: A Narrative Review

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Ahmad Juliana(1Mail),
(1) Program Studi Magister Ilmu Manajemen, Fakultas Ekonomi dan Bisnis, Universitas Borneo Tarakan, Indonesia

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Available online: 2024-10-21  |  Published : 2024-10-21
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Abstract


Excessive bank risk-taking is a leading cause of banking crises, and the CEO plays a central role in such decisions. This article presents a narrative review of the literature on CEO power and CEO tenure as antecedents of bank risk-taking. A semi-systematic search of Scopus found that literature testing both constructs in a banking context remains very limited, comprising roughly 20 documents published between 2009 and 2024. The synthesis shows that CEO power generally increases bank risk-taking, although the strength of this relationship varies with the power measure used, the institutional context, and crisis periods. CEO tenure shows a more complex pattern and is rarely tested separately from CEO power. Good Corporate Governance, particularly board independence and institutional ownership, consistently moderates this relationship. The review also identifies a stark geographic gap: most studies originate from the United States, Europe, and the Middle East, while Indonesia and ASEAN are almost unrepresented. The article concludes with a research agenda calling for empirical studies on Indonesian banks that account for Good Corporate Governance moderation under the Financial Services Authority (OJK) and Bank Indonesia (BI), serving as the conceptual foundation for a subsequent System GMM study.

Keywords


CEO power; CEO tenure; bank risk-taking; corporate governance; narrative review

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