Title: Board characteristics and banks' foreign shareholdings: evidence on monitoring quality

Authors: Vítor Manuel Morais Pereira; José António Candeias Bonito Filipe

Addresses: CEFAGE-ISCAL, ISCAL – Instituto Superior de Contabilidade e Administração de Lisboa, Instituto Politécnico de Lisboa, Lisbon, Portugal ' BRU-IUL – Business Research Unit, ISTAR-IUL – Information Sciences and Technologies and Architecture Research Center, Instituto Universitário de Lisboa (ISCTE-IUL), Lisbon, Portugal

Abstract: This research studies the effect of board characteristics such as board size, board diligence, and board committees on attracting banks' foreign shareholders. Using partial least squares-structural equation modelling, the most appropriate statistical method for this research, we consider the variables of monitoring quality and the attraction of foreign investors as well as several control variables. The sample used in this research includes all banks operating in Portugal in the two periods of analysis (2011-2014 and 2015-2018). This study finds that monitoring quality has a small negative effect on attracting foreign investors and that foreign investors are not particularly interested in corporate governance. It thus provides important implications for decision-makers, demonstrating that caution is needed when proposing measures and policies.

Keywords: board characteristics; foreign shareholdings; corporate governance; board of directors; Portuguese banks.

DOI: 10.1504/IJBSR.2022.119600

International Journal of Business and Systems Research, 2022 Vol.16 No.1, pp.106 - 124

Received: 12 Dec 2019
Accepted: 06 Mar 2020
Published online: 11 Dec 2021 *

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