Europe's bank boards 'lack financial experience'

A new corporate governance study has indicated that the chairmen of major European banks have less financial expertise than before the economic crisis.

The report from Nestor Advisors, which examined the governance standards of Europe's 25 largest financial institutions, found that only 64 per cent of chairpersons had recent experience of the financial industry last year.

This is down from 80 per cent in 2007, prompting co-author of the study Stilpon Nestor to comment that there are still "clouds on the governance horizon" for the continent's banks.

However, the report also offered proof that large organisations are seeking diversity at the top level and changing their executive recruitment processes for the better.

The London-based consultancy discovered that only one of the 25 institutions did not have any female non-executive directors in June 2010. Back in 2007, seven of the banks lacked female representation in such roles.

The study also revealed that 17 of the 25 banks now use standalone risk committees, up from 12 three years ago.