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Determinants of board members' financial expertise -- Empirical evidence from France

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  • Jeanjean, Thomas
  • Stolowy, Hervé

Abstract

Very few countries require directors to be financially literate. This article investigates the determinants of boards' financial expertise using a sample of 95 nonfinancial French listed firms. We construct a measure of financial expertise based on educational and career background data for 943 individuals occupying 1140 posts in our sample and explore the determinants of average per-firm financial expertise using a Tobit analysis. We find that average financial expertise is negatively associated with board type (two-tier versus one-tier) and growth opportunities and positively associated with board independence, ownership concentration, and institutional ownership. These findings are robust to sensitivity analyses.

Suggested Citation

  • Jeanjean, Thomas & Stolowy, Hervé, 2009. "Determinants of board members' financial expertise -- Empirical evidence from France," The International Journal of Accounting, Elsevier, vol. 44(4), pages 378-402, December.
  • Handle: RePEc:eee:accoun:v:44:y:2009:i:4:p:378-402
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    14. Rey Dang & Anne Françoise Bender & Marie José Scotto, 2014. "Women on French Corporate Board of Directors: How Do They Differ from their Male Counterparts?," Working Papers 2014-54, Department of Research, Ipag Business School.
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    More about this item

    Keywords

    Financial expertise Board of directors Supervisory board Corporate governance;

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D53 - Microeconomics - - General Equilibrium and Disequilibrium - - - Financial Markets

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