Board of director’s Characteristics and Bank’s Insolvency Risk: Evidence from Tunisia

Since the changes of banks’ environment at the end of the Eighties, Tunisian banks tried to expand their activities in order to provide suitable strategic answers to these changes but their performance indicators have greatly deteriorated. This underperformance was partly explained by the weak framework of corporate governance in Tunisian banks. Our objective is to explore board of directors’ diversity as well as the presence of independent directors, the size of the board and its leadership structure on insolvency risk of Tunisian banks. The results show that demographic diversity enhances the insolvency risk of the Tunisian banks but cognitive diversity contributes to its reduction. The results show also that the size of the board of directors as well as duality have positive effects on the insolvency risk but the percentage of independent directors is associated with a lower risk. Keywords: Banks, Insolvency risk, Board of directors, Diversity, Tunisi

Interaction effect between product and process innovation: the case of Tunisian banks

The authors examine the impact of the relationship between two types of financial innovation and bank performance. The research attempts to test hypotheses that are not yet validated by previous studies focusing on the financial services industry, thus, giving the study an exploratory look. The authors try, specifically, to determine the interaction effect of both types of financial innovation on bank performance and, then, try to enrich innovation theory with new hypotheses on product and process innovation. The results show that Tunisian banks have begun, probably, to see the importance or the need for the simultaneous adoption of two types of financial innovation since 1995 to improve their poor performance. The authors also find that the interaction effect of product and process innovation reduces profitability. However, efficiency is achieved in terms of market share and value. The authors conclude that financial innovation is a value creation instrument for Tunisian bank

Determinants of voluntary disclosure in Tunisian bank’s reports

Disclosure and bank transparency are currently of crucial importance with regard to the adaptation of regulatory tools (Basle II) to enhance the stability of the banking sector. Voluntary disclosure in banking firms can improve the transparency of market transaction and forcing bankers to reduce the risk taking. The paper aims to examine the determinants of voluntary disclosures of listed banks in Tunisia. Using Prais-winsten regression model to test the determinants of the level of voluntary disclosure, on a sample based on 10 banks observations during the period 2000-2011. Results show that higher board size, blockholder ownership and state ownership is associated with decreased disclosure. However, proportion of independent directors, CEO duality and auditors’ reputation are not related to banks’ voluntary disclosure. Moreover, an increase in foreign ownership and bank performance increases corporate disclosure. The paper also finds that larger banks had greater disclosure. This paper provides evidence for Tunisian regulators to improve corporate governance and optimize ownership structure. Distinct from prior empirical research based on disclosure behavior in developed markets, this study examines the determinants of voluntary disclosures of listed banks in Tunisia. Keywords: Voluntary disclosure, Banks, Tunisia, Corporate ownership, Boards of director