scholarly journals Corporate Governance in the Banking Sector (Empirical Study on the Effect of Separating Chairman and Chief Executive Officer (CEO) Positions on Financial Performance)

2016 ◽  
Vol 5 (3) ◽  
Author(s):  
Ayman Mohamed Zerban ◽  
Wael Bahaa El Din Ateia
Keyword(s):  
Corporate Governance ◽  
Empirical Study ◽  
Financial Performance ◽  
Chief Executive Officer ◽  
Banking Sector ◽  
Chief Executive

scholarly journals Corporate governance in the Brazilian banking sector: A study of practices adopted by the boards

2011 ◽  
Vol 8 (2) ◽  
pp. 37-46
Author(s):  
Marcelle Colares Oliveira ◽  
Lindenberg Araújo Aragão ◽  
Vera Maria Rodrigues Ponte
Keyword(s):  
Corporate Governance ◽  
Best Practices ◽  
Chief Executive Officer ◽  
Board Member ◽  
Banking Sector ◽  
Early Stage ◽  
Chief Executive ◽  
Stage Of Development ◽  
Banking Institutions ◽  
And Control

This study is an analysis of the best practices of corporate governance adopted by the boards of Brazilian banking institutions. The findings show that most banks adhere to the latest Brazilian Institute of Corporate Governance guidelines with regard to board size and to the standards required by BM&FBovespa in terms of independence. The banks studied are rigorous with regard to audits and control in the process of corporate governance and most have a diversified board with the positions of chief executive officer and chairman occupied by different individuals. Practices regarding disclosure of board member remuneration are still at an early stage of development with banks restricting disclosure to what is required by law.

scholarly journals Leadership and Ethnicity in Public Companies in Malaysia

2007 ◽  
Vol 2 (2) ◽  
Author(s):  
Dominic Lai Yew Hock
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Chief Executive Officer ◽  
Stock Exchange ◽  
Chief Executive ◽  
Listed Companies ◽  
Business Culture ◽  
Foreign Direct Investments ◽  
Gross Margin ◽  
Leadership Structure

Corporate Governance gained prominence in Malaysia during the Asian financial crisis of 1997, which operated as a wake up call that the existing corporate governance structures in public listed companies were insufficient. In response, Kuala Lumpur Stock Exchange issued the Listing Requirements on 22 January 2001 to regain investors’ confidence and attract foreign direct investments. The Listing Requirements included a Code of Best Practices in Corporate Governance that favours the leadership structure of separate Chairman/Chief Executive Officer posts. Malaysia is a multi-racial country comprising predominantly of the indigenous Malays, the Chinese and the Indians. The Chinese in Malaysia continue to play a significant role in the economy. These Chinese practise a distinctive Chinese business culture in the running of their businesses. The literature reveals that the adoption of the prescribed leadership structure of separating the Chairman and Chief Executive Officer positions is not likely to improve the financial performance of Chinese controlled companies. An empirical research is conducted, using 218 Chinese controlled public listed companies in Malaysia. The data covered three years from 2001 to 2003. Financial performances of the companies were measured using return on equity, earnings per share, dividend per share, liquid asset per share and gross margin. t-test and Mann Whitney test were used. The results show that there has been widespread adoption of the leadership structure recommended under the Code by the sample companies. The results also show that adoption of the prescribed leadership structure under the Code has no significant impact on the financial performance of the sample companies.

scholarly journals Interaction Among Corporate Governance, Innovation, and Performance in Vietnam’s Banking Sector

2020 ◽  
Vol 11 (5) ◽  
pp. 235
Author(s):  
Quang Linh Huynh ◽  
Huy Hoang Tran ◽  
Hong Anh Thi Nguyen
Keyword(s):  
Corporate Governance ◽  
Chief Executive Officer ◽  
Agency Costs ◽  
Banking Sector ◽  
Statistical Significance ◽  
Chief Executive ◽  
Board Independence ◽  
Research Model ◽  
Mediating Role ◽  
And Performance

Background/Objectives: The current research tries to investigate effects of the three elements of corporate governance (chief executive officer duality, board independence and size) on banking performance and then analyze the mediating role of innovation on these effects, which are overlooked at Vietnamese banks.Methods/Statistical analysis: The research sample for this research encompassed 78 usable firm-year observations of 25 publicly listed organizations in the banking sector on Vietnam’s three main Stock Exchanges during a 4-year period from 2015 to 2018. To test out the causal hypotheses, the multiple linear regressions were carried out; while to statistically explore the mediating hypotheses, the approaches for testing the statistical significance of mediating effects, proposed by Aroian (1947) were applied.Findings: The empirical findings disclose that good mechanisms of corporate governance in banking can lead to superior banking performance. The empirical results also discover that innovative activities in banking statistically interferes in the causal linkage between corporate governance and banking performance; where innovation fully interferes between the duality of management and banking performance, but it partially interferes in the relations of board independence and board size with banking performance.Improvements/Applications: This research indicates that the banks, in which the positions of the director and chairperson are held by one separate person, may suffer agency costs, so achieve poorer banking performance. Therefore, the banks in Vietnam should assign the positions of the chief executive officer and chairperson to two separate individuals. The banks should hire more independent executives in the managerial board in order to lessen agency costs, so can get better banking performance. Moreover, the banks with larger managerial boards can improve banking performance since they possess better business experience, expertise, skill and other relations that can create substantial resources, so enhance banking success. It also shows that when included into the research model of corporate governance and banking performance, innovativeness in banking should be carefully considered, because it could interfere into this research model.

scholarly journals Assessing the Impact of Corporate Governance Index on Financial Performance in the Romanian and Italian Banking Systems

2021 ◽  
Vol 13 (10) ◽  
pp. 5535
Author(s):  
Marco Benvenuto ◽  
Roxana Loredana Avram ◽  
Alexandru Avram ◽  
Carmine Viola
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Banking Sector ◽  
Research Question ◽  
Interactive Effect ◽  
Banking System ◽  
Capital Adequacy ◽  
Banking Systems ◽  
Governance Index ◽  
The Impact

Background: Our study aims to verify the impact of corporate governance index on financial performance, namely return on assets (ROA), general liquidity, capital adequacy and size of company expressed as total assets in the banking sector for both a developing and a developed country. In addition, we investigate the interactive effect of corporate governance on a homogenous and a heterogeneous banking system. These two banking systems were chosen in order to assess the impact of corporate governance on two distinct types of banking system: a homogenous one such as the Romanian one and a heterogeneous one such as the Italian one. The two systems are very distinct; the Romanian one is represented by only 34 banks, while the Italian one comprises more than 350 banks. Thus, our research question is how a modification in corporate governance legislation is influencing the two different banking systems. The research implication of our study is whether a modification in legislation, thus in the index of corporate governance, is feasible for two different banking sectors and what the best ways to increase the financial performance of banks are without compromising their resilience. Methods: Using survey data from the Italian and Romanian banking systems over the period 2007–2018, we find that the corporate governance has a significant, positive and long-lasting effect on profitability and capital adequacy in both countries. Results: Taking the size of the company into consideration, the impact of the Index of Corporate Governance (ICG) on a homogenous banking system is positive while the impact on a heterogeneous banking system is negative. Conclusions: Our study provides evidence of the impact of IGC on financial performance and sheds light on the importance of the size of the company. Therefore, one can state that the corporate governance principles applied do not encourage the growth of large banks in heterogeneous banking sectors, thereby suggesting new avenues of research associated with new perspectives.

scholarly journals Aplicação dos princípios da governança corporativa ao sector público

2007 ◽  
Vol 11 (2) ◽  
pp. 11-26 ◽  
Author(s):  
Maria da Conceição da Costa Marques
Keyword(s):  
Corporate Governance ◽  
Chief Executive Officer ◽  
Chief Executive

A corporate governance na perspectiva dos Estados Unidos influenciou largamente a Europa, mas não serviu assim tão bem quanto isso. A corporate governance é para assegurar que as empresas apresentam melhor performance, melhor monitorização e protecção dos investidores. No modelo anglo-saxónico, os accionistas estão longe da empresa, mas nos Estados Unidos as administrações são dominadas pela gestão, e existe algum conflito real entre o CEO (Chief Executive Officer) e o Presidente. Sob várias perspectivas, o modelo europeu é um bom modelo porque a maioria das empresas têm um grupo de accionistas que exercem uma influência directa no controlo dos negócios das empresas, mesmo que alguns não o façam. Em Portugal, esta situação requer novas estruturas e atitudes. As empresas locais ainda não quantificaram os custos de uma fraca governação. O teste deste sucesso será o encaminhamento do capital para mercados onde os investidores têm confiança. Um caminho português deve ser encontrado. Neste estudo pretende-se apresentar como os princípios da corporate governance podem ser aplicados ao sector público.

The Influence of Risk Management, Third-Party Funds and Capital Structure on Banking Sector Financial Performance in Indonesia and Thailand with Corporate Governance as Moderating Variable in 2015-2019

2021 ◽  
pp. 71-80
Author(s):  
Nurtika Ekawati ◽  
◽  
Unggul Purwohedi ◽  
Ari Warokka ◽  
◽  
...  
Keyword(s):  
Risk Management ◽  
Corporate Governance ◽  
Capital Structure ◽  
Financial Performance ◽  
Banking Sector ◽  
Stock Exchange ◽  
Partial Least Square ◽  
Third Party ◽  
Return On Assets ◽  
Study Results

The banking sector plays an important role in the country's economic growth. International experience shows that a weak banking sector not only threatens the long-term stability of a country's economy. It can also cause a financial crisis which can lead to economic crisis. Therefore, it is important to identify and investigate the factors on which the financial performance of banks depends. The purpose of this study is to analyze the influence of risk management, third-party funds and capital structure on banking sector financial performance in Indonesia and Thailand with corporate governance as moderating variable. The authors use return on assets (ROA) as the key indicator of bank efficiency. The data used in this study are secondary data, including nonperforming loan (NPL), loan-to-deposit ratio (LDR), operating expenses to operating income (BOPO), net interest margin (NIM), third party funds (TPF), debt-to-equity ratio (DER), return on assets (ROA), corporate governance. The data was obtained from the official website of the Indonesia Stock Exchange (www.idx.co.id) and the Thai Stock Exchange (www.set.or.th). The sample used in this study is 20 conventional banks listed on the Indonesia and Thailand Stock Exchange from 2015-2019. The methodological basis of this study is the use of the Structural Equation Model (SEM) with Partial Least Square (PLS). Data processing was performed in the WarpPLS 7.0 software. The study results show that NPL and LDR have a negative and significant influence on the financial performance of banks. At the same time, the BOPO and DER do not affect the financial performance of banks. The NIM and TPF have a significant and positive influence on the bank's financial performance. In addition, corporate governance does not moderate risk management relationship to the bank's financial performance. The results of this study can benefit bank shareholders and customers, and bank management.

A consensus-based corporate governance paradigm for Islamic banks

2014 ◽  
Vol 6 (1) ◽  
pp. 93-108 ◽  
Author(s):  
Monal Abdel-Baki ◽  
Valerio Leone Sciabolazza
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Banking Sector ◽  
Performance Metrics ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Content Type ◽  
Sustainable Finance ◽  
Market Driven ◽  
The Needy

Purpose – Islamic banking is a viable sustainable banking model that has shown resilience to financial crises. The aim of this research is to design a consensus-based ethical and market-driven corporate governance index (CGI) to boost financial performance and ensure compliance with Islamic rulings. Design/methodology/approach – The design of the CGI is the outcome of the feedback obtained from a cross-country survey to measure bank efforts in enhancing corporate governance (CG) throughout the ten-year period of 2001-2011. The CGI is divided into six core CG themes and 40 sub-themes. Findings – First, the results of the multiple regression analysis show a consistent positive relationship between CG and financial performance metrics. Second, the authors detect misaligned compensation structures for directors. Third, poor governance leads to higher risk exposures. Research limitations/implications – CG in Islamic banks is yet an evolving discipline and infant practice. This research aims to introduce a CGI that should be updated and improved as the discipline evolves. Practical implications – The research concludes by proposing a CG paradigm. The outcome of the research could also be of use to both Islamic banks and to the rapidly growing sustainable banking sector in designing a similar CGI and CG model incorporating the ethical features of sustainable finance. Social implications – The core ethos of Islam are: avoiding the exploitation of the needy, avoiding excessively risky transactions, avoiding unethical transactions and justice, equity and income redistribution. If properly applied, Islamic banking will display all features of sustainable finance as well as enhance social welfare. Originality/value – To the best of the authors' knowledge, this is the first CGI that is based on an ethical and all-inclusive input of all stakeholders.

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