Determinants of the degree of the presence of related directors on the board of a bank
Thu Ha Tran  1@  
1 : Université de Limoges  (UNILIM)  -  Site web
Laboratoire d'analyse et de prospectives économiques
33 rue François Mitterrand BP23204 87032 Limoges -  France

We investigate the determinants of the presence of directors who are related to either controlling shareholders or minority shareholders on the bank's board of directors. Working on a sample of 96 banks with concentrated ownership structure across 17 countries in Europe, we find that the relative voting power of the ultimate owner, the excess control rights of the ultimate owner and the degree of economic freedom in a country increase the proportion of directors who are related to controlling shareholders on the board. On the other hand, we find that the relative voting power of the ultimate owner impacts negatively on the presence of minority directors meanwhile the relative control rights of other controlling shareholder vis-à-vis the largest ultimate owner, the quality of corporate governance and the level of shareholder protection increase the presence of minority director on the bank's board of directors. We also find that the power of banking supervisory agency of a country has a negative relationship with the presence of minority directors on the bank's board of directors. This indicates that minority shareholders count on the banking supervisory agency to oversee banks' performance and thus, in countries having high levels of supervisory power, minority shareholders are less motivated to participating in supervising banks' controlling parties.


Personnes connectées : 1