This research studies the effect of board characteristics such as board size, board diligence, and board committees on attracting banks’ foreign shareholders. Using partial least squares–structural equation modelling, the most appropriate statistical method for this research, we consider the variables of monitoring quality and the attraction of foreign investors as well as several control variables. The sample used in this research includes all banks operating in Portugal in the two periods of analysis (2011–2014 and 2015–2018). This study finds that monitoring quality has a small negative effect on attracting foreign investors and that foreign investors are not particularly interested in corporate governance. It thus provides important implications for decision makers, demonstrating that caution is needed when proposing measures and policies.

The authors acknowledge the financial support from Instituto Politécnico de Lisboa, research project IPL/2018/IIPB_ISCAL.

Board characteristics,Foreign shareholdings,Corporate governance,Board of directors,Portuguese banks

• Matemáticas - Ciências Naturais
• Economia e Gestão - Ciências Sociais