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Boards of Banks

52 Pages Posted: 5 Jun 2010 Last revised: 3 Nov 2012

Daniel Ferreira

London School of Economics - Department of Finance; European Corporate Governance Institute (ECGI); Centre for Economic Policy Research (CEPR)

Tom Kirchmaier

London School of Economics - Centre for Economic Performance; Copenhagen Business School

Daniel Metzger

Stockholm School of Economics - Department of Finance; London School of Economics & Political Science (LSE) - Financial Markets Group

Date Written: October 16, 2010

Abstract

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.

Keywords: Boards, Directors, Bank Governance

JEL Classification: G34

Suggested Citation

Ferreira, Daniel and Kirchmaier, Tom and Metzger, Daniel, Boards of Banks (October 16, 2010). ECGI - Finance Working Paper No. 289/2010. Available at SSRN: https://ssrn.com/abstract=1620551 or http://dx.doi.org/10.2139/ssrn.1620551

Daniel Ferreira (Contact Author)

London School of Economics - Department of Finance ( email )

Houghton Street
London, WC2A 2AE
United Kingdom
(+44) 20 7955 7544 (Phone)

HOME PAGE: http://personal.lse.ac.uk/FERREIRD/

European Corporate Governance Institute (ECGI)

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

HOME PAGE: http://www.ecgi.org

Centre for Economic Policy Research (CEPR) ( email )

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

Tom Kirchmaier

London School of Economics - Centre for Economic Performance ( email )

Houghton Street
London, WC2A 2AE
United Kingdom
+44 207 955 6854 (Phone)

HOME PAGE: http://https://sites.google.com/site/tomkirchmaier/home

Copenhagen Business School ( email )

Porcelænshaven 24A, 3rd floor
Copenhagen
Denmark

Daniel Metzger

Stockholm School of Economics - Department of Finance ( email )

SE-113 83 Stockholm
Sweden

London School of Economics & Political Science (LSE) - Financial Markets Group ( email )

Houghton Street
London WC2A 2AE
United Kingdom

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