Determinants of board members' financial expertise - Empirical evidence from France

Cahier de Recherche du Groupe HEC Paris, n° 903Very few countries require directors to be financially literate. This article investigates he determinants of boards' financial expertise using a sample of 95 non-financial Frenh listed firms. We construct a measure of financial expertise based on educational and career background data for 943 individuals occupying 1,140 posts in our sample and explore the determinants of average per-firm financial expertise using a Tobit analysis. We find that average financial expertise is negatively associated with board type (two-tier versus one-tier) and growth opportunities and positively associated with board independence, ownership concentration, and institutional ownership. These findings are robust to sensitivity analyses