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Supervisory Board Qualification of German Banks - Legal Standards and Survey Evidence

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Listed:
  • Körner, Tobias
  • Müller, Oliver
  • Paul, Stephan
  • Schmidt, Christoph M.

Abstract

Improving the regulation of banks has been at the centre of economic policy actions since the outbreak of the global financial crisis. One of the many and conceptually very different measures proposed is to improve the corporate governance of banks by setting qualification standards for banks' non-executive directors. To explore the rationale of such a regulation implemented in Germany, we conducted a detailed survey among supervisory board members of German banks covering their educational background, professional status and experience, as well as non-occupation related activities. We document that general education among supervisory board members is high, but very few board members can rely on a professional background in banking and finance. Surprisingly, we find that this is especially true for chairpersons and that a higher share of professionals among board members primarily reflects the presence of employee representatives. However, as regards competencies and skills required to enforce changes against the management, chairpersons more often report leadership experience than ordinary members. Furthermore, some of these fi ndings strongly depend on the bank's legal form, its size and business model, suggesting that both market forces and institutional characteristics of banking markets are important determinants of the qualification level of non-executive directors.

Suggested Citation

  • Körner, Tobias & Müller, Oliver & Paul, Stephan & Schmidt, Christoph M., 2013. "Supervisory Board Qualification of German Banks - Legal Standards and Survey Evidence," Ruhr Economic Papers 436, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
  • Handle: RePEc:zbw:rwirep:436
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    References listed on IDEAS

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    1. Pathan, Shams, 2009. "Strong boards, CEO power and bank risk-taking," Journal of Banking & Finance, Elsevier, vol. 33(7), pages 1340-1350, July.
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    Cited by:

    1. Körner, Tobias & Müller, Oliver & Paul, Stephan & Schmidt, Christoph M., 2014. "Glas halb voll oder halb leer? Eine Analyse der Qualifikation von Kontrollorganmitgliedern deutscher Banken," RWI Materialien 78, RWI - Leibniz-Institut für Wirtschaftsforschung.
    2. repec:zbw:rwimat:078 is not listed on IDEAS
    3. Tobias Körner & Oliver Müller & Stephan Paul & Christoph M. Schmidt, 2014. "Glas halb voll oder halb leer? Eine Analyse der Qualifikation von Kontrollorganmitgliedern deutscher Banken," RWI Materialien, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, pages 19, 05.

    More about this item

    Keywords

    non-executive directors; qualification; survey data; banking regulation; German banking system;

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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