Bank board changes in size and composition: Do they matter for investors?

Research Question/Issue This research seeks to explain whether changes in bank board size and/or composition signal the effectiveness of terms monitoring and advising. Findings/Insights Our contribution provides empirical evidence on negative reaction investors changes, identifies variables that this reaction, finds banks with experienced executive directors their are candidates announce increases size. analysis is based 608 announcements by headquartered 19 European countries over period 2003–2015. We apply Event Studies methodology, Heckman's analysis, system estimator regressions, probit analysis. Theoretical/Academic Implications results allow us conclude perceive as an ineffective response problems, except when increase number non-executives. Bank shareholders positively value has a powerful corporate officer negatively those high dividends these changes. Banks higher interest margin experience seniority more prone make composition, while officers, distracted responsibilities other boards, non-executive attrition, where all non-executives male, one-tier large country, or delisting from stock markets will avoid Practitioner/Policy study offers insights policy makers interested enhancing banks' governance. Boards should improve information transparency decisions. In addition, it about influence Board Chairs who hold position design