How (in-)competent are the supervisory boards of German banks?

An evaluation of the CVs of 426 supervisory board members in the 29 biggest German banks that was carried out by Harald Hau of INSEAD, Fontainebleau, and Marcel Thum of Ifo Dresden shows that members of the supervisory boards of public banks in Germany have less banking and financial-market experience than their counterparts in the private sector. They often thus lack the competence to effectively carry out their supervisory function. The particularly high losses of these banks in international financial transactions are explainable, in the researchers' opinion, by the lack of effective supervision of management. Demands for additional bank regulation appear largely irrelevant for Hau and Thum as long as the existing supervisory board structures are without adequate supervisory competence.