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Evaluating the board of directors of financial intermediaries: competencies, effectiveness and performance

Author

Listed:
  • Carretta, Alessandro
  • Farina, Vincenzo
  • Schwizer, Paola

Abstract

This paper proposes a model for analysing the effectiveness of boards of directors of financial intermediaries. The European Union recommends that companies in the Member States annually evaluate the performance of their boards. The degree of effectiveness of a board should be appreciated taking into account the business structure, ownership and institutional model of the firm, on the one hand, and the characteristics of its board, in terms of its composition, structure and skills, on the other hand. This paper also outlines the specificity of the role played by boards of directors in financial intermediaries, also in the light of the industry standards and regulations, and provides an overview of the board assessment methodologies proposed in literature, or developed by listed companies on the Anglo-saxon markets, with a view to considering their applicability to the financial sector. Lastly, and based on the foregoing, the paper proposes a model for diagnosing the conditions that need to be put into place to ensure the suitability of boards of directors and to evaluate the performance of both the board as a whole and the individual directors.

Suggested Citation

  • Carretta, Alessandro & Farina, Vincenzo & Schwizer, Paola, 2006. "Evaluating the board of directors of financial intermediaries: competencies, effectiveness and performance," MPRA Paper 8299, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:8299
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    File URL: https://mpra.ub.uni-muenchen.de/8299/1/MPRA_paper_8299.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Corporate Governance; Board of Directors; Performance;

    JEL classification:

    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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