Supervisory Board Qualification of German Banks – Legal Standards and Survey Evidence

38 Pages Posted: 16 Sep 2013

See all articles by Tobias Körner

Tobias Körner

German Council of Economic Experts

Oliver Mueller

University of Bochum

Stephan Paul

Ruhr Universität Bochum - Faculty of Economics

Christoph M. Schmidt

RWI - Leibniz-Insitut für Wirtschaftsforschung (RWI Essen); Ruhr-Universität Bochum (RUB); Institute for the Study of Labor (IZA); Centre for Economic Policy Research (CEPR)

Date Written: August 1, 2013

Abstract

Improving the regulation of banks has been at the center of economic policy actions since the outbreak of the global financial crisis. One of the many and conceptually very different measures proposed is to improve the corporate governance of banks by setting qualification standards for banks’ non-executive directors. To explore the rationale of such a regulation implemented in Germany, we conducted a detailed survey among supervisory board members of German banks covering their educational background, professional status and experience, as well as non-occupation related activities. We document that general education among supervisory board members is high, but very few board members can rely on a professional background in banking and finance. Surprisingly, we find that this is especially true for chairpersons and that a higher share of professionals among board members primarily reflects the presence of employee representatives. However, as regards competencies and skills required to enforce changes against the management, chairpersons more often report leadership experience than ordinary members. Furthermore, some of these findings strongly depend on the bank’s legal form, its size and business model, suggesting that both market forces and institutional characteristics of banking markets are important determinants of the qualification level of non-executive directors.

Keywords: Non-executive directors, qualification, survey data, banking regulation, German banking system

JEL Classification: G21, G28, G34

Suggested Citation

Körner, Tobias and Mueller, Oliver and Paul, Stephan and Schmidt, Christoph M., Supervisory Board Qualification of German Banks – Legal Standards and Survey Evidence (August 1, 2013). Available at SSRN: https://ssrn.com/abstract=2325285 or http://dx.doi.org/10.2139/ssrn.2325285

Tobias Körner (Contact Author)

German Council of Economic Experts ( email )

Federal Statistical Office
Gustav-Stresemann-Ring 11
Wiesbaden, Hessen 65180
Germany
+49(0)611 75 28 86 (Phone)

Oliver Mueller

University of Bochum ( email )

Department of Economics
Bochum, 44780
Germany
+49-234-32 27683 (Phone)
+49-234-32 14699 (Fax)

HOME PAGE: http://www.ruhr-uni-bochum.de/fin-kred/mueller

Stephan Paul

Ruhr Universität Bochum - Faculty of Economics ( email )

Ruhr University of Bochum
Faculty of Economics
Bochum, DE 44780
Germany

Christoph M. Schmidt

RWI - Leibniz-Insitut für Wirtschaftsforschung (RWI Essen) ( email )

Hohenzollernstraße 1-3
Essen, 45128
Germany
++49 201 8149-227 (Phone)
++49 201 8149-236 (Fax)

Ruhr-Universität Bochum (RUB)

GC 2/150
Universitätsstr. 150
D-44780 Bochum
Germany

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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