http://ijba.sciedupress.com International Journal of Business Administration Vol. 12, No. 3; 2021 Published by Sciedu Press 42 ISSN 1923-4007 E-ISSN 1923-4015 Impact of Board of Directors on Performance of Brazilian Banks Rodolfo Fialho Perondi 1 , Bento Alves da Costa Filho 1 & Alcido Elenor Wander 2 1 Master Program in Business Administration, Centro Universitario Alves Faria (UNIALFA), Goiania, GO, Brazil 2 Master Program in Regional Development, Centro Universitario Alves Faria (UNIALFA), Goiania, GO, Brazil Correspondence: Alcido Elenor Wander, Master Program in Regional Development, Centro Universitario Alves Faria (UNIALFA), Av. Perimetral Norte, 4129, Vila Joao Vaz, 74445-190 Goiania, GO, Brazil. Tel: 55-623-272-5120. Received: December 15, 2020 Accepted: January 29, 2021 Online Published: April 5, 2021 doi:10.5430/ijba.v12n3p42 URL: https://doi.org/10.5430/ijba.v12n3p42 Abstract The objective of this paper is to verify if the performance of Brazilian banks was impacted by the characteristics of their boards of directors in the period from 2010 to 2016. Performance indicators were defined as the Return on Assets (ROA) and Return on Equity (ROE) indicators, widely used in bank surveys. To accomplish the objective, a sample of twenty-nine financial institutions registered at the Securities and Exchange Commission (CVM) was selected. Results showed that the variables representing the influences exerted by the board include the number of directors and percentage of female members is significant to explain Return on Assets (ROA), while the variables average age of the directors, the percentage of independent directors, and segregation of the functions of chairman and chief executive officer, are significant in explaining Return on Equity (ROE). Keywords: board of directors, bank governance, performance, independence of the board JEL Codes: M10, M12, M14 1. Introduction The Jensen and Meckling (1976) characterization of the agency problem has shown that when an organization is managed not by its "principal" (owner) but by an "agent" (administrator), divergences arise between their desires. While the principal expects the maximum return on his resources, the agent may act within his interests. Faced with the challenges of reconciling these interests, governance has the role of creating mechanisms and instruments that allow the convergence of the parties' aspirations, this being "means by which resource providers make sure they get a return on their investment" (Shleifer; Vishny 1997, p. 737). Key elements of corporate governance ensure the creation of a healthy environment and the creation of value to organizations, among which stands out the existence of an effective and independent board of directors, with members external to the corporation; audit council and/or a proactive, active audit committee; and effective risk management (Cardozo, 2005). It is emphasized that effective action is required by the board of directors, through its "duty of care" and "duty of fidelity", under the applicable national laws and supervisory norms, with active involvement in the main issues of the bank and acting promptly to protect long-term interests of the banks (BIS, 2015). Bank governance plays an important role in the national economy, as incidents in the financial system can affect the whole economy. Thus, a solid governance structure with effective controls and monitoring, carried out by the board of directors, will result in the efficient allocation of capital and performance of the financial system itself (Levine, 2004). The relationship between bank governance and economic performance has been studied in the international literature (Liang et al., 2013; Fidanoski et al., 2014; Kramaric and Pervan, 2016; Chou and Buchdadi, 2017; Aslan and Haron, 2020). However, research on this matter in Brazil is not common, which motivates the raise of questions such as how intense the influence of characteristics of Brazilian bank boards is (e.g., independence of directors, number of meetings, the dual position of directors, among others) on economic fulfillment, represented in this study by return on assets and/or return on equity. Based on the assumption that corporate governance provides an increase in the economic value of the organization