Do Shareholders Penalize Bank Boards and Management for the Financial Crisis?

The 2007-2008 financial crisis was a pervasive shock that profoundly impacted the financial services industry. Often described as the worst economic crisis since the Great Depression, this event provides a unique opportunity to examine the consequences experienced by members of boards of directors and top management at bank holding companies for what shareholders may perceive as failures in oversight and excessive risk-taking. This study examines whether shareholders penalized top management at banks and provides some new evidence of the crisis’s impact on management careers. Using the 36 largest American bank holding corporations by assets as a sample, we examine director re-election percentages and other director, management, and firm characteristics to determine the extent to which shareholders indicate their disapproval of banks ’ boards of directors during and after the financial crisis. By employing various methods of empirical analysis