THE DETERMINANTS OF MINORITY DIRECTORS ON BANK BOARDS

This paper examines factors that determine the presence of minority directors (i.e., directors who are related to minority shareholders) on board of directors in banks with concentrated ownership structure. Using a panel of controlled European banks for the period 2011-2017, our results show that the voting rights of large shareholders increase the presence of minority directors on bank boards. We also find that the large shareholders promote the presence of minority directors on bank boards when the degree of opacity of the bank is high and the level of shareholder protection of the country where the bank is located is strong.