Boards Determinants in Banking Industry: An International Perspective

Abstract

Using and international sample of commercial banks over the period 1996-2006, our study analyzes if bank’s specific factors and the legal environment in which they operate affect the board’s composition. We consider the dual role of the board as both monitor and advisor. Results show that there is no optimal board for every bank but it depends on several variables such as the bank’s size, the ownership concentration, the growth opportunities and the monitoring power of the country’s authorities. Our results lead us to a warning related to the general recommendations included in the codes of good governance because each bank needs a specific board of directors.

Keywords: Banks, Corporate Governance, Board of Directors, Board's determinants

JEL Classification: G21, G34