world has undergone some drastic changes since the crash of Lehmann Brothers in the fall of 2008. The Danish financial institutions were also struck by the crisis and one of the main reasons was the risky behavior the management showed. This thesis is directed towards Corporate Governance in the savings banks as their legal structure provides the management possible control over the company. That leaves the depositors with no formal control over the management’s behavior and that has lead to the research question, ”Corpo-rate Governance in a savings bank – how are the depositors’ interests safeguarded?” Through an analysis of the depositor’s motives to become so, it is derived that they primarily have three interests. These are focused on securing the independence and the earnings while being able to influence the direction of the savings bank. However the legal structure poses some risks for the depositors’ interests, because the management has the de facto control over the savings bank. Therefore the risks are primarily centered around the management and whether they are taking too few or too many risks and/or if they are focusing on their own interests rather than the depositors’. Therefore it is interesting to see whether Corporate Governance can play a role in securing the de-positor’s interests. It is found that it has a crucial role in the safeguarding of these, as Corporate Governance is designed to enhance the companies’ openness. This, however, only sets the bounda-ries, it is the companies themselves who decide whether Corporate Governance is effective. One of the key elements in making a good Corporate Governance effort is the board, as they are the stewards of the depositor’s interests. Therefore their views and beliefs are vital in order to secure the depositors’ interests. In order for them to carry out their job it is crucial that the company have effective internal controls and risk assessment, otherwise it is impossible for them to control the company. Through the legislation the Danish Financial Supervisory Authority is one of the mechanisms that provide assurance to the stakeholders, including the depositors’, whether or not the board is doing their job properly. The auditors, both external and internal, are also key mechanisms for providing that kind of assur-ance. Through an extensive set of legislation they offer information on the savings banks perfor-mance on key areas. The final conclusion on the thesis is that the depositors’ interests are safeguarded through heavy regulation and supervisory bodies. However the effect of their work is dependent on how the board manages to be the unifying character. Therefore if the depositors’ want maximum security then they will have to join the board and play an active role in the savings bank themselves.
|Educations||MSc in Auditing, (Graduate Programme) Final Thesis|
|Number of pages||124|