Stakeholder governance and private benefits: The case of politicians in Spanish cajas

Our research focuses on the private benefits of politicians as board directors of Spanish savings banks (cajas). We use hand-collected data on the political affiliation and personal loans of 1,578 directors to investigate whether political directors used private benefits through excessive personal loans, loans granted to their political parties, or the institutions they represented. Our results show that a higher proportion of political directors on a board is associated with larger personal loans and with better terms than those granted to non-political directors. Furthermore, this higher proportion is also linked to larger loans granted to the public administrations that the political directors represented on the cajas’ governing board. Finally, we also find in-group favouritism based on the social identity theory and directors’ party identification. Therefore, political directors make greater use of private benefits when allocated to their political party and its members.