THE IMPACT OF CORPORATE GOVERNANCE ON RISK MANAGEMENT: EVIDENCE FROM THE BANKING SECTOR OF PAKISTAN

Authors

  • UMER GULZAR M.Phil. Scholar, Department of Management Sciences, The Islamia University of Bahawalpur, Pakistan Author
  • SAJJAD NAWAZ KHAN Assistant Professor, Department of Management Sciences, The Islamia University of Bahawalpur, Pakistan Author
  • FAHAD JAVED BAIG Assistant Professor, Department of Management Sciences, The Islamia University of Bahawalpur, Pakistan Author
  • M. AKBAR ALI ANSARI Assistant Professor, Department of Commerce, The Islamia University of Bahawalpur, Pakistan Author
  • RABIA AKRAM M.Phil. Scholar, Department of Management Sciences, The Islamia University of Bahawalpur, Pakistan Author
  • MUHAMMAD KAMRAN M.Phil. Scholar, Department of Management Sciences, The Islamia University of Bahawalpur, Pakistan Author

Keywords:

Risk Management, Corporate Governance, Bank risk, CEO Turnover, Gender diversity, capital risk,, credit risk, liquidity risk

Abstract

This study evaluates the impact of corporate governance on bank risks that are capital risk, credit risk, and liquidity risk of twenty commercial banks that are listed on the Pakistan Stock Exchange throughout 2009-2018. Data was collected from Annual reports and accounts of the sampled banks. Random-effect GLS regression technique used to analyze data. The empirical results found that different CG dimensions impact differently on bank risks. In the context of Pakistan, the results reveal that board independence, gender diversity on board and audit committee have a significant effect on bank risks, while board size and CEO turnover have an insignificant effect. As the fundamental purpose of any company is to create and deliver long-term sustainable value in line with its commitments as a responsible corporate citizen, it is recommended that the Bank, therefore, does not view corporate governance as an end in itself but as a critical factor in creating long-term value for all stakeholders. To raise the level of influence of corporate governance on banking risk to a higher level in Pakistan's banking industry. The independence of the audit committee needs to be increased. This allows management to protect the interests of all stakeholders, not just their interests.

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Published

2021-09-30

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Articles

How to Cite

GULZAR, U. ., KHAN, S. N. ., BAIG, F. J. ., ANSARI, M. A. A. ., AKRAM, R. ., & KAMRAN, M. . (2021). THE IMPACT OF CORPORATE GOVERNANCE ON RISK MANAGEMENT: EVIDENCE FROM THE BANKING SECTOR OF PAKISTAN. Bulletin of Business and Economics (BBE), 10(3), 196-207. https://bbejournal.com/index.php/BBE/article/view/314

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