BOARD EDUCATIONAL DIVERSITY AND BANK FINANCIAL REPORTING QUALITY: VIETNAM EVIDENCE

Abstract

The study investigates the educational diversity of board members, focusing on the impact of educational level and educational background on the quality of financial reporting (FRQ). The research sample comprises 27 listed Vietnamese commercial banks, with 216 observations collected during the period from 2016 to 2023. The study employs the Feasible Generalized Least Squares (FGLS) method to analyze the data. The findings indicate that educational backgrounds about financial/accounting expertise among board members have a positive effect on FRQ. In contrast, no significant evidence was found regarding the influence of educational levels. However, the interaction between the educational level and educational background contributes to improving the FRQ. These findings underscore the critical importance of establishing a board of directors structure characterized by diversity in educational backgrounds and educational levels, as a means to enhance the effectiveness of board oversight.