Inside the Boardroom: Evidence from the Board Structure and Meeting Minutes of Community Banks

Rosalind Bennett, Manju Puri and Paul E. Soto
Additional contact information
Paul E. Soto: https://www.federalreserve.gov/econres/paul-e-soto.htm

No 2024-085, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)

Abstract: Community banks are critical for local economies, yet research on their corporate governance has been scarce due to limited data availability. We explore a unique, proprietary dataset of board membership and meeting minutes of failed community banks to present several stylized facts regarding their board structure and meetings. Community bank boards have fewer members and a higher percentage of insiders than larger publicly traded banks, and experience little turnover during normal times. Their meetings are held monthly and span about two hours. During times of distress, community bank boards convene less often in regularly scheduled meetings in lieu of impromptu meetings, experience higher turnover, particularly among their independent directors, and their meeting tone switches from neutral to significantly negative. Board attention during distressed times shifts towards discussion of capital and examination oversight, and away from lending activities and meeting formalities.

Keywords: Corporate governance; Board of directors; Banking; Machine learning; Natural language processing (search for similar items in EconPapers)
JEL-codes: C81 G21 G34 (search for similar items in EconPapers)
Pages: 35 p.
Date: 2024-10-17
New Economics Papers: this item is included in nep-ban and nep-cfn
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.federalreserve.gov/econres/feds/files/2024085pap.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgfe:2024-85

DOI: 10.17016/FEDS.2024.085

Access Statistics for this paper

More papers in Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.) Contact information at EDIRC.
Bibliographic data for series maintained by Ryan Wolfslayer ; Keisha Fournillier ().