<abstract xmlns="http://www.w3.org/1999/xhtml"><p> Corporate governance is viewed as an important, essential, and most significant factor for well-functioning of firms. Recent academic work and policy analyses have given insight into the governance problems in banks exposed to the financial crisis and suggest possible solutions. This paper begins by explaining the importance of corporate governance and its impact on risk taking and bank performance based on the theoretical background relevant to the corporate governance of banks. I combine the literature that looks at three areas of governance: ownership structure; board structure; and risk management, with the literature on risk-taking and performance effects in order to better assess the weight of the impact that these governance mechanisms have on both performance and risk. The paper concludes by highlighting the areas where further research is needed.</p></abstract>

Corporate governance is viewed as an important, essential, and most significant factor for well-functioning of firms. Recent academic work and policy analyses have given insight into the governance problems in banks exposed to the financial crisis and suggest possible solutions. This paper begins by explaining the importance of corporate governance and its impact on risk taking and bank performance based on the theoretical background relevant to the corporate governance of banks. I combine the literature that looks at three areas of governance: ownership structure; board structure; and risk management, with the literature on risk-taking and performance effects in order to better assess the weight of the impact that these governance mechanisms have on both performance and risk. The paper concludes by highlighting the areas where further research is needed.

Corporate Governance in Banks and its Impact on Risk and Performance: Review of Literature on the Selected Governance Mechanisms

Journal of Central Banking Theory and Practice

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Corporate governance is viewed as an important, essential, and most significant factor for well-functioning of firms. Recent academic work and policy analyses...

Corporate Governance in Banks and its Impact on Risk and Performance: Review of Literature on the Selected Governance Mechanisms

Publié en ligne: 25 sept. 2014

Pages: 53 - 85

Reçu: 14 juil. 2014

Accepté: 28 août 2014

DOI: https://doi.org/10.2478/jcbtp-2014-0015

Mots clés
banks, boards, owners, corporate governance, risk taking, performance

© Central Bank of Montenegro

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Corporate Governance in Banks and its Impact on Risk and Performance: Review of Literature on the Selected Governance Mechanisms

Publié en ligne: 25 sept. 2014

Pages: 53 - 85

Reçu: 14 juil. 2014

Accepté: 28 août 2014

DOI: https://doi.org/10.2478/jcbtp-2014-0015

Mots clésbanks, boards, owners, corporate governance, risk taking, performance

© Central Bank of Montenegro

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Mots clés
banks, boards, owners, corporate governance, risk taking, performance