The value of corporate boards during the Great Depression in Belgium

Abstract

We investigate how board characteristics were related to the value of listed Belgian firms in the 1928-1931 period, when investor protection was weak and firms were hit by the largest financial crisis of the 20 th century. We find that firms typically had a large board and many directors held multiple directorships. Most boards included bank directors. While large, busy boards and bankers on the board were positively related to firm value before the crisis, their value significantly decreased from 1929 onwards, suggesting that these boards were less suited to face a crisis. Board busyness seems to be the main driver of negative board effects during the crisis. We also find that riskier firms which had busier and larger boards experienced a larger drop in value.

Why do firms pay dividends? 180 years of evidence

“…As discussed above, universal banks were of utmost importance for the founding and funding of new firms in Belgium. Moreover, these universal banks often maintained shares in the companies they founded, and it was common to have at least one director affiliated with a universal bank (from now on 'bank director') in the board of directors (Chlepner, 1930(Chlepner, , 1943Deloof & Vermoesen, 2016). The omnipresence of universal banks stands in clear contrast with the situation in the UK.…”

Modern Chinese banking networks during the Republican Era

“…Based on similar research [e.g. Deloof and Vermoesen (2016), Acheson et al (2016b), Nguyen, Hagendorff, andEshraghi (2015)], I include as controls a set of characteristics and potential determinants for the financial performance of each bank: firm size, age , board size, number of cities in which a bank has branch, total staff number, liquidity ((reserve fund + cash on hand)/total deposits), leverage (total deposits/total assets), and investment volume in securities (the sum of investment in securities of a bank, including stocks, real estate and government bonds).…”