Discussion Paper of the Institute for Organisational Economics 3/2011

Welche Unternehmen berufen Vorstandsvorsitzende und andere Vorstände als externe Kontrolleure?
Eine empirische Analyse der Präsenz von externen Vorständen in den Aufsichtsräten deutscher Großunternehmen

Achim Buchwald
March 2011



Which Companies Appoint Chairmen and Regular Executives as Outside Monitors?
An Empirical Investigation of the Presence of External Executives on the Supervisory Boards of Large German Companies

The appointment of external managers to the supervisory board is common practice between large companies. During the past decades, German companies were linked by a dense network of personal linkages via executive and supervisory boards. Based on panel data for the period from 1997 to 2008 this paper empirically analyses trends and firm-specific factors that explain the presence of outside executives on the supervisory boards of large German companies. The results of the econometric estimations reveal a positive relation between company size and stock ownership of the companies in the sample and the presence of outside executives on the supervisory board. Separate estimations for the group of chairmen and regular executives on the executive committee show that chairmen are more likely to join the supervisory boards of more successful, diversified and listed companies. Finally, the analysis controls for the effect of the coefficients during the period before and the period following the tax reform in 2002 that enabled companies to sell large shareholdings without paying taxes for capital gains.