Abstract
This article investigates how the combination of positions between the Board of Directors and the management affects bank’s profitability. We use the 2010 bank-level data from 112 countries (Bankscope). Our results suggest that the positions combination reduce both banks’ ROA and ROE. We also show that the higher is the proportion of the Board members, who also hold a managerial position, the lower is the profitability of a bank. Thus, the corporate governance regulation should go beyond a simple restriction on holding simultaneously the CEO and the head of Board of Directors positions.