Bank efficiency in the African banking sector: Does board independence matter?

This study examines the relationship between board independence and bank efficiency. Using a sample of 78 commercial banks operating in the African region from 2016 to 2019, the findings reveal that board independence significantly enhances technical efficiency, as measured by data envelopment analysis (DEA). Additionally, chief executive officer (CEO) duality, gender diversity on boards, and the presence of committees positively influence bank efficiency. The results also highlight the role of bank capitalization in improving overall bank efficiency. These findings suggest that adopting good governance mechanisms, such as increasing the number of independent administrators, female board members, and board committees, plays a crucial role in boosting bank efficiency.