Boards of Banks
London School of Economics & Political Science (LSE) - Department of Finance; European Corporate Governance Institute (ECGI); Centre for Economic Policy Research (CEPR)
University of Manchester - Manchester Business School; London School of Economics & Political Science (LSE) - Financial Markets Group (FMG)
Stockholm School of Economics - Department of Finance; London School of Economics & Political Science (LSE) - Financial Markets Group
October 16, 2010
ECGI - Finance Working Paper No. 289/2010
We show that country characteristics explain most of the cross-sectional variation in bank board independence. In contrast, country characteristics have little explanatory power for the fraction of outside bank directors with experience in the banking industry. Exploiting the time-series dimension of the sample, we show that changes in bank characteristics are not robustly associated with changes in board independence, while changes in board experience are positively related to changes in bank size and negatively related to changes in performance. The evidence suggests that country-specific laws and regulations affect the composition of boards of banks mainly through requirements for director independence.
Number of Pages in PDF File: 52
Keywords: Boards, Directors, Bank Governance
JEL Classification: G34
Date posted: June 5, 2010 ; Last revised: November 3, 2012
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