Regulatory Pressure and Bank Directors' Incentives to Attend Board Meetings

Regulatory Pressure and Bank Directors' Incentives to Attend Board Meetings

Renee Adams, Daniel Ferreira

Series number :

Serial Number: 
203/2008

Date posted :

April 01 2008

Last revised :

SSRN Share

Keywords

  • Bank directors • 
  • regulators • 
  • Incentives • 
  • attendance • 
  • board meetings

The primary way in which directors obtain necessary information is by attending board meetings. Bank directors, in particular, are strongly urged to attend meetings by regulators. We investigate whether such pressure is sufficient for bank directors to have good attendance records.

Using data on whether directors were named in proxy statements as attending fewer meetings than they were supposed to, we find that a) bank directors appear to have worse attendance records than their counterparts in nonfinancial firms, b) their attendance behavior is related to explicit and implicit incentives for attendance, and c) past attendance records are not related to the likelihood a director departs the board. Our results suggest that explicit and implicit incentives may provide important complements to regulatory pressure in influencing director behavior.

Published in

Published in: 
Publication Title: 
International Review of Finance
Description: 
12 (2), 227-248

Authors