The Importance of Corporate Governance of Banks Concerning the Ownership in the International Environment

Festić, Mejra; Črepinko, Polona; Bratina, Borut

doi:10.2478/ngoe-2020-0020

Cited by 3 publications

(4 citation statements)

References 44 publications

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“…board members should have a clear understanding of their role in corporate governance and be able to make good decisions about the affairs of the bank. Therefore, non-executive directors devoted neither sufficient resources nor time to fulfiling their duties (Festić, Črepinko & Bratina, 2020). Abdullah (2004) confirms that the number of independent board members does not have a significant influence on financial performance.…”

Section: Board Structure and Bank Performancementioning

confidence: 94%

“…In the banking sector, the board of directors -as an internal mechanism of corporate governance -has a significant role, hence research into board effectiveness is very important for improving financial performance. Therefore, the last financial crisis also showed that board of directors did not fulfil their role (Festić, Črepinko & Bratina, 2020), i.e. their effectiveness needs to be improved.…”

Section: Introductionmentioning

confidence: 99%

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Board Structure and Bank Performance: The Mediating Role of Intellectual Capital

Nikolić

Nielsen

Peković

2022

Naše Gospodarstvo/Our Economy

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Intellectual capital in the knowledge era is a strategic advantage of board structure, which leads to the improvement of a company’s work and the achievement of its goals. The aim of this study is to develop a structural model that connects the corporate governance, intellectual capital and financial performance of the banking sector. Corporate governance is conceptualised by the board of directors as the main internal mechanism of corporate governance, which is measured by the size of the board of directors, the number of independent board members and the female board members. Intellectual capital represents a mediator in this model and its efficiency is calculated through the Value Added Intellectual Coefficient (VAIC) model, while the financial performance of banks is measured through return on assets (ROA) and return on equity (ROE). The results of the study conducted in 22 Serbian banks between 2015 to 2019 show that the size of the board of directors and the number of independent board members have a statistically significant impact on intelectual capital (IC), but there is no impact on total assets (ROA). The number of women in the board of directors does not have a statistically significant effect on either ROA or ROE. The findings also indicate that intellectual capital (HCE, SCE, CEE) has a significant mediating role in the relationship between board structure and bank performance. The results of this study will provide a significant contribution to further investment in intellectual capital as the strongest link in achieving positive effects on bank performance.

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Section: Board Structure and Bank Performancementioning

confidence: 94%

Section: Introductionmentioning

confidence: 99%

Board Structure and Bank Performance: The Mediating Role of Intellectual Capital

Nikolić

Nielsen

Peković

2022

Naše Gospodarstvo/Our Economy

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“…The reason for using PCA is that using individual variables may not be sufficient to capture and adequately reflect the corporate governance status of the financial institutions when used independently (Alam and Sattar 2019;Festić et al 2020). To achieve PCA, the eigenvalues of the variance matrix must be computed.…”

Section: Principal Component Analysis (Pca)mentioning

confidence: 99%

Key Determinants of Corporate Governance in Financial Institutions: Evidence from South Africa

Khoza,

Makina,

Makoni

2024

Risks

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The purpose of this study was to examine the key determinants of corporate governance in selected financial institutions. Using South African financial institutions as a unit of analysis, namely insurance companies and banks, the study employed a panel generalised method of moments (GMM) model using a data set for the period from 2007 to 2020, to assess key determinants of corporate governance proxies identified for the study. The study sampled 21 South African financial institutions composed of Johannesburg Securities Exchange (JSE) listed and unlisted banks and insurance companies. To measure corporate governance, the study developed a composite index employing the principal components analysis (PCA) method. The findings revealed a positive and significant association between the corporate governance index and its lagged variables. Furthermore, a significant and positive link was found between the efficiency ratio and corporate governance index and capital adequacy ratio (CAR); corporate governance index and firm size; corporate governance index and leverage ratio (LEV); and corporate governance index and return on assets (ROA). However, a negative and significant correlation was found between financial stability and the corporate governance index. The link between return on equity (ROE) and corporate governance was insignificant. A small cohort of financial institutions was excluded because it was challenging to obtain complete annual reports to extract the required data. The study was limited to only five corporate governance measures, namely board diversity, board size, board composition (independent non-executive directors and non-executive directors), and board remuneration. The findings are anticipated to persuade developing countries to pay special attention to how corporate governance is measured.

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“…We expect to find whether a better ownership structure can intensify or mitigate the relationship between EPU and company performance in our research. Strong corporate governance has become more necessary since the financial crisis happened in 2008 (Festić et al, 2020). However, considering the practicality and operability, we decide to study ownership structure which is one aspect of corporate governance because whether the structure of the board of directors in a company is optimal can directly influence the decision-making process of the company and management quality (Heugens et al, 2009;Lin et al, 2009).…”

Section: Introductionmentioning

confidence: 99%

Do Controlling Ownership Structure Moderate the Link between Economic Policy Uncertainty and Firm Value?

Zhu¹,

Wu²

2023

HBEM

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In this study, we investigate the relationship between economic policy uncertainty (EPU) and firm value of Chinese listed companies. Our research is based on China’s EPU index developed by previous researchers and financial data on 1749 Chinese listed companies from 2011 to 2020. The empirical results reveal that economic policy uncertainty negatively influences firm value, and that corporate governance affects the degree of the effect. To be more specific, we investigate the moderating effect of corporate governance in terms of ownership structure and use 3 variables, the largest shareholder’s holding, board size, and independent directors’ proportion, to measure ownership structure. The results show that the increase in the largest ownership and the expansion of board size can help companies go through the negative effect of EPU on firm value, while the increase in the proportion of independent directors can intensify the effect. The evidence illustrates that Chinese policymakers should pay attention to the possible impact of initiating a new economic policy on firm value. More importantly, our empirical results also give directors of Chinese listed companies advice about how they should adjust their ownership structure to mitigate the effect of the volatility caused by economic policy.

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The Importance of Corporate Governance of Banks Concerning the Ownership in the International Environment

Cited by 3 publications

References 44 publications

Board Structure and Bank Performance: The Mediating Role of Intellectual Capital

Board Structure and Bank Performance: The Mediating Role of Intellectual Capital

Key Determinants of Corporate Governance in Financial Institutions: Evidence from South Africa

Do Controlling Ownership Structure Moderate the Link between Economic Policy Uncertainty and Firm Value?

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