Bank Boards: What Has Changed Since the Financial Crisis?

63 Pages Posted: 31 Jan 2019 Last revised: 3 Mar 2020

See all articles by Shivaram Rajgopal

Shivaram Rajgopal

Columbia Business School

Suraj Srinivasan

Harvard Business School

Yu Ting Forester Wong

University of Southern California - Leventhal School of Accounting

Date Written: January 1, 2019


We investigate how board oversight of U.S. banks has improved since the 2008 financial crisis. Several government-mandated committees have highlighted four key deficiencies with bank boards before the crisis: (i) group think among bank board members; (ii) absence of prior banking experience of board members; (iii) busy board members, especially the chairperson; and (iv) inadequate emphasis on risk management. Our empirical analysis compares proxies for these deficiencies between 97 U.S. banks and 1,297 nonbanks before (2007) and after the crisis, 2008-2015. Based on such an analysis, we do not find (i) that a significant difference in the proportion of directors has turned over from bank boards since 2007 relative to boards of 1,297 firms in other industries; (ii) evidence of greater gender or racial diversity in bank boards or of a greater split between the chairperson and CEO’s position or of an increase in the number of directors appointed outside of the current CEO’s tenure in the post crisis period, relative to nonbanks; (iii) that the number of outside board seats of bank directors, a measure of time commitment, has fallen after the crisis, and (v) that a bank's chairperson is less likely to sit on at least one outside board, relative to before the crisis. Virtually every bank now has a Chief Risk Officer (CRO) but the CRO is unlikely to feature among the top five most compensated employees of the average bank. The number of banks that have an independent risk committee and a committee devoted to reputation management has increased since the crisis. We conduct several validity checks to ensure that improvements in our governance proxies are indeed shareholder value increasing events. In sum, the composition of bank boards appears to have responded modestly to the financial crisis.

Keywords: Corporate Governance, Financial Crisis, Banks, Bank Board, Board of Director, Diversity, Chairperson, 2008 Crisis

JEL Classification: m41, m48

Suggested Citation

Rajgopal, Shivaram and Srinivasan, Suraj and Wong, Yu Ting Forester, Bank Boards: What Has Changed Since the Financial Crisis? (January 1, 2019). Available at SSRN: or

Shivaram Rajgopal

Columbia Business School ( email )

3022 Broadway
New York, NY 10027
United States

Suraj Srinivasan

Harvard Business School ( email )

Soldiers Field
Boston, MA 02163
United States


Yu Ting Forester Wong (Contact Author)

University of Southern California - Leventhal School of Accounting ( email )

Los Angeles, CA 90089-0441
United States

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