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Inside or outside control of banks? Evidence from the composition of supervisory boards

Author

Listed:
  • Kathrin Johansen

    (University of Rostock)

  • Saskia Laser

    (University of Rostock)

  • Doris Neuberger

    (University of Rostock
    IFF)

  • Ettore Andreani

    (UniCredit S.p.A.)

Abstract

This paper examines the composition of supervisory boards of 41 large German banks in 1999–2010. We find that the supervisory board structure reflects both outside control by major shareholders and inside control by other stakeholders. The largest group among non-employee board members is made up of bank managers. The high proportion of former executives and German board representation indicates significant inside control. The chairpersons of banks controlled by banks are less likely to be former executives of the same bank than are the chairpersons of banks controlled by non-banks. Over time, representation of industrial and insurance companies on banks’ supervisory boards has decreased and the representation of banks and foreign shareholders has increased.

Suggested Citation

  • Kathrin Johansen & Saskia Laser & Doris Neuberger & Ettore Andreani, 2017. "Inside or outside control of banks? Evidence from the composition of supervisory boards," European Journal of Law and Economics, Springer, vol. 43(1), pages 31-58, February.
    • Handle: RePEc:kap:ejlwec:v:43:y:2017:i:1:d:10.1007_s10657-014-9463-y
    DOI: 10.1007/s10657-014-9463-y
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    More about this item

    Keywords

    Corporate governance; Dual board system; Principal agent theory; Stakeholder theory; Banks;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

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