| Using banks in the U.S. credit union industry, I explore how board size affects firm governance and outcomes. Differential regulations on minimum board size among state and federally chartered credit unions generate cross-sectional and time-series variation in board size. I use this source of variation to estimate the effect of board size on credit union performance. Banks with larger boards have higher efficiency, offer more favorable loan terms to their members, and have easier access to member funding. The effect of having a larger board is stronger when the credit union's CEO has a board seat. These results suggest corporate board structure, particularly board size, is an important governance mechanism. |
