Regulatory Pressure and Bank Directors' Incentives to Attend Board Meetings

32 Pages Posted: 11 Oct 2006 Last revised: 23 Jul 2012

See all articles by Renee B. Adams

Renee B. Adams

University of Oxford; ABFER

Daniel Ferreira

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

Date Written: April 2008

Abstract

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

Adams, Renée B. and Ferreira, Daniel, Regulatory Pressure and Bank Directors' Incentives to Attend Board Meetings (April 2008). ECGI - Finance Working Paper No. 203/2008, Available at SSRN: https://ssrn.com/abstract=936261 or http://dx.doi.org/10.2139/ssrn.936261

Renée B. Adams (Contact Author)

University of Oxford ( email )

Park End Street
Oxford, OX1 1HP
Great Britain

ABFER

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Daniel Ferreira

London School of Economics - Department of Finance ( email )

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London, WC2A 2AE
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(+44) 20 7955 7544 (Phone)

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

European Corporate Governance Institute (ECGI)

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1000 Brussels
Belgium

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

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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