Corporate governance and banking performance in the context of globalization (original) (raw)

Corporate governance in the banking sector

Performance, Risk and Competition in the Chinese Banking Industry, 2014

Corporate governance is an important topic in all kinds of companies and has attracted attention from government, company directors, stakeholders, and academic researchers. Appropriate development of the relationship between company and different stakeholders, which is addressed by corporate governance, is supposed to promote improvements in firm performance. Banks, as important financial institutions, play important roles in a country's economy. They deal with the relationship between management and different shareholders as well as depositors. There are different interpretations of the meaning of corporate governance. The chapter begins by defining corporate governance. This is followed by a section entitled ''Theories relevant to corporate governance''. There then follow sections entitled ''Corporate governance problems of banks'' and ''Bank corporate governance in practice''. The chapter ends with a conclusion.

Role of Corporate Governance in Banking Sector: Evidence from All over the World

2013

This paper is focused on the recent research in the area of performance effect of corporate governance in banking sector. We review the results of studies devoted to two key nonfinancial characteristics of a commercial bank influencing its performance. In the first part of the paper we analyze the evidence on board of directors structure impact on bank performance. We focus on the performance effect of board size, independent directors and gender diversity of the board. In the second part we discuss the issue of bank ownership structure. In this paper we pay special attention to the difference between performance drivers in developed and emerging markets as well as to the performance drivers changes in times of financial crisis.

Theoretical Aspects of Corporate Governance: Why It Matters in Banking Sector

Livre de Lyon, 2020

After the global financial crises, corporate bankruptcies and frauds reached to a great extent, it has been concluded that the necessary attention is not given to corporate governance practices on a country or firm basis. Application of corporate governance principles is of great importance in terms of the companies' ability to operate in both domestic and foreign markets and of keeping up with economic or technological changes. Corporate governance; in line with the principles of transparency, accountability, responsibility, and fairness, is a set of rules and practices that put the relations between company management and all stakeholders in a certain order. The company management has to shape its relations with stakeholders within the framework of the four principles mentioned. The countries or companies whose corporate governance practices are not considered effective are greatly likely to lose their appeal to investors and these losses reach significant dimensions. Therefore, corporate governance practices should have an effective structure, especially in the banking sector, which guides the economy to a large extent and provides financing to the real sector. In addition to the financial crises and corporate scandals resulting from ineffective corporate governance policies, developments such as the markets becoming interdependent as a result of globalization, the increasing weight of corporate investors in company investments, and the acceleration of privatization activities drew attention to the importance of corporate governance practices in both the real sector and the banking sector. At this point, corporate governance emerges as a concept that aims to resolve the negative situations and to keep up with the developments. Due to the functions of banks to stabilize the financial system and contribute positively to economic growth, the scope of corporate governance in banks differs from corporate governance practices in companies operating in the other sectors. The recent realization of large-scale reforms in the banking sector and the fact that banks have an important place in the economies of developing countries have increased the importance of effective corporate governance practices in banks. Considering the emergence process of the concept of corporate governance; it is seen that the negative effects of financial crises, which are one of the most important factors in the emergence of the so-called process, are felt in the banking sector first and then in the real sector. It is possible to express that the importance of corporate governance in the banking sector differs compared to other sectors due to the functions of banks to provide capital financing to companies operating in the real sector and to realize effective resource allocation. In this context, the first step in implementing the effective corporate governance practices in the banking sector in Turkey was taken after the 2001 banking crisis, which negatively affected first the financial sector and then the real sector.

A Study of the Impact of Corporate Governance on Performance of Banks - Review of Literature

International Journal of Business Ethics in Developing Economies, 2022

This paper reviews the literature of research done regarding the impact of corporate governance variables on performance of the company. There have been various researches done to measure the impact of corporate governance variables on performance of the company. The paper reviews all relevant research literature from the last two decades. Major variables of corporate governance that were studied are: board and board subcommittee composition, chairman and CEO duality, gender diversity, ownership structure, and shareholders' participation. Researchers studied the impact of these variables on financial performance, viz., return on equity (ROE), return on assets (ROA), NPA level, capital adequacy ratio, and earnings per share (EPS).

Corporate Governance in Banking Industry: An Explanatory Study

Research Journal of Finance and Accounting, 2016

The purpose of this study is to examine the current practices of corporate governance in banking industry, especially in Indonesia. Good corporate governance is critical for banking Industry because with good corporate governance, the bank could preventive the banks from financial fraud that could lead to financial distress and bankruptcy Yeoh (2007). Furthermore, through corporate governance statement, the banks ensure public that they follow the all Bank Indonesia’s rules and regulations. Bank Indonesia as banks’ regulator in Indonesia requires a corporate governance statement of each bank to be reported and published, together with audited annual report. The research question of this study focuses on: ‘Is it true, that foreign management involvement in banking industry lead to better corporate governance?’ In order to answer the research question, then, this study focuses on an examination governance structure and governance mechanism of 10 out of 39 public listed banks in Indo...

THE CORPORATE GOVERNANCE IMPACT ON BANKING PERFORMANCE INCREASE Empirical Study

2013

The gradual collapse of financial markets in the European Union since the fall of 2008 and the economic crisis in the area of the credit sportfolio level that followed, were generated by several factors, often interdependent, both on a macroeconomic and microeconomic level, and finally leading to the accumulation of excessive risk in the financial system. This excessive risk has been partially caused by the deficiencies in Corporate Governance of the Financial Institutions and especially by banks deficiencies. Even if we can't put down when the Corporate Governance crisis has started, non-existent or inadequacy of effective control mechanisms determined the excessive risk-taking by most credit institutions. This article aims to evaluate the application of Corporate Governance Principles of the significant players within the Romanian banking system. The research methodology was essentially based on using the questionnaire technique, on published Corporate Governance's documen...

Successful Implementation of Corporate Governance Mechanisms in Banks20191028 38306 m804y1

Corporate Governance is significant in managing the financial sector particularly banks of both the developing and the developed nations. Major corporate collapses worldwide revealed the presence of weak corporate governance system. The researcher conducted survey from the finance managers of the five commercial Jordanian banks which revealed that good corporate is significant for the performance of the banks. Good corporate governance balances the conflict of interest among the stakeholders. The participants believed that good corporate governance mechanisms such as transparency, privacy, legislations, code of conduct and clarity of procedures can enhance the efficiency of the banks. They believed that good corporate governance mechanisms effects the bank risks such as it protects the shareholders, stakeholders and reduces or transfers risk and ensures the stability of the economy. Hence, good corporate governance is essential for achieving success of the banking sector and in turn for the economic growth. The participants suggested that implementing good corporate governance in the banks leads to the integration of the capital markets, better solutions of the corporate governance issues and helps in building trust, integrity and transparency.

The Relevance of Good Corporate Governance Practices to Bank Performance

Journal of Economics and Business, 2021

The purpose of this paper is to examine how corporate governance instruments impact firm value in the context of Cambodian banks. This paper considers foreign and domestic-owned banks in Cambodia. This study opts for a balanced sample of foreign and domestic owned banks for the period 2014-2018. Panel data regression is adopted for estimation of main results. The suitable model, i.e. fixed and random effect model is selected using the Hausman specification test where the result shows that the random effect model using generalized least square (GLS) regression is more suitable for the analysis. The findings show that Cambodian banks are having a substantially higher percentage of NEDs on their board, high implementation of governance procedures on board committees where on average the banks are having more than the required two board committees (audit and risk committees) as required by the Prakas on the governance of banks by National Bank of Cambodia. The average board size is arou...

Successful Implementation of Corporate Governance Mechanisms in Banks20191028 1189 yr2m25

Journal of Social Sciences , 2019

Corporate governance and banking performance in the context of globalization (original) (raw)

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