Regulatory Pressure and Bank Directors' Incentives to Attend Board Meetings
32 Pages Posted: 11 Oct 2006 Last revised: 23 Jul 2012
Date Written: April 2008
The primary way in which directors obtain necessary information is by attending board meetings. Bank directors, in particular, are strongly urged to attend meetings by regulators. We investigate whether such pressure is sufficient for bank directors to have good attendance records. Using data on whether directors were named in proxy statements as attending fewer meetings than they were supposed to, we find that a) bank directors appear to have worse attendance records than their counterparts in nonfinancial firms, b) their attendance behavior is related to explicit and implicit incentives for attendance, and c) past attendance records are not related to the likelihood a director departs the board. Our results suggest that explicit and implicit incentives may provide important complements to regulatory pressure in influencing director behavior.
Keywords: Bank Directors, Regulators, Incentives, Attendance, Board Meetings
JEL Classification: G34, G38, J41, M52
Suggested Citation: Suggested Citation