This paper investigates what factors determine whether a commercial banker is on the board of a non-financial firm. We consider the tradeoff between the benefits of direct bank monitoring to the firm and the costs of active bank involvement in management.

Despite the widespread view from Berle and Means (1932) onward that ownership of firms in increasingly separated from managerial control of those firms, almost no time series research exists to address this issue. Using the earliest available source on ownership for a large cross-section of US...