Bestyrelsens ansvar og kompetencer i danske banker

Anders Niklas W. Jensen & Rasmus Eske Bruun

Student thesis: Master thesis

Abstract

The thesis centers about the role of board members in the Danish banking sector. The beginning of the financial crisis in 2008 has troubled several banks in both Denmark and the rest of the world and has brought focus on the legislation for the banking sector and the management of banks. A new Companies Act was implemented in 2009, but did not alter the basis for liability for board members under Danish law. However, the financial crisis and financially troubled banks have lead to a tightening of the legislation for financial institutions and these changes have given the Financial Services Authority more authority. The tightening of the legislation has lead to a more precise definition of the board members’ duties and responsibilities and therefore the liability has increased for board members in financial institutions compared to regular limited companies. In 2001 the Committee for Corporate Governance introduced the first recommendations for corporate governance, which include recommendations for board members’ profile and skills. Therefore we have made an empirical analysis of the composition of board members in the largest Danish banks and if the composition has direct effect on the banks’ performance and strategy. The analysis on whether there is concrete tendencies between the boards’ composition and the banks’ performance has shown mixed results, however we have found a rather clear tendency that shows that the more board members in a bank under the age of 60, the higher return on equity. Combined with other similar results this indicates, that board members above the age of 60 exercise a more cautious strategy for the bank. The analysis has also shown that from 2007 to 2010 there has been an increase of 150 percent of board members that possess more than five board positions, which oppose the corporate governance recommendations. Board members liability is both direct and personal and in case of a lawsuit, only a few board members will have the necessary assets to pay indemnity and therefore board members can prevent such a situation by proposing to grant the board of directors discharge from liability or by purchasing Directors’ & Officers’ liability insurance.

EducationsMSc in Commercial Law, (Graduate Programme) Final Thesis
LanguageDanish
Publication date2012
Number of pages129