Determinants of Board Members' Financial Expertise - Empirical Evidence from France

34 Pages Posted: 14 Oct 2008

See all articles by Thomas Jeanjean

Thomas Jeanjean

ESSEC Business School - Department of Accounting and Management Control

Hervé Stolowy

HEC Paris - Accounting and Management Control Department

Date Written: October 14, 2008

Abstract

Very few countries require directors to be financially literate. This article investigates the determinants of boards' financial expertise using a sample of 95 non-financial French listed firms. We construct a measure of financial expertise based on educational and career background data for 943 individuals occupying 1,140 posts in our sample and explore the determinants of average per-firm financial expertise using a Tobit analysis. We find that average financial expertise is negatively associated with board type (two-tier versus one-tier) and growth opportunities and positively associated with board independence, ownership concentration, and institutional ownership. These findings are robust to sensitivity analyses.

Keywords: Financial expertise, board of directors, supervisory board, corporate governance

JEL Classification: M41, G32, G34, L84

Suggested Citation

Jeanjean, Thomas and Stolowy, Hervé, Determinants of Board Members' Financial Expertise - Empirical Evidence from France (October 14, 2008). Available at SSRN: https://ssrn.com/abstract=1284506 or http://dx.doi.org/10.2139/ssrn.1284506

Thomas Jeanjean

ESSEC Business School - Department of Accounting and Management Control ( email )

Av Bernard Hirsch
Cergy-Pontoise 95021
France

Hervé Stolowy (Contact Author)

HEC Paris - Accounting and Management Control Department ( email )

Jouy-en-Josas Cedex
France
+33 1 39 67 94 42 (Phone)
+33 1 39 67 70 86 (Fax)

HOME PAGE: http://www.hec.fr/stolowy

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