ASSESSING THE IMPACT OF CORPORATE GOVERNANCE ON THE PERFORMANCE OF FINANCIAL INSTITUTIONS

Irina-Stefana Cibotariu ()
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Irina-Stefana Cibotariu: Stefan cel Mare University of Suceava, 720229, Romania

European Journal of Accounting, Finance & Business, 2024, vol. 12, issue 2, 136-145

Abstract: In the context of the global economy and the increasing importance of corporate governance in the banking sector, this study explores the relationship between the quality of corporate governance and the financial performance of financial institutions. Through an econometric analysis applied to ICBC, HSBC and J.P. Morgan Chase & Co., the study examines the impact of corporate governance on key financial indicators, including return on assets (ROA), return on equity (ROE), price-earnings ratio (P/E) and price-to-book ratio (P/B). The Corporate Governance Index (CGI), developed for this study, quantifies the elements of corporate governance and allows a comparative analysis of financial performance across the institutions analyzed. The results have contributed to econometric models that can indicate the influence of various corporate governance factors on financial performance. Moreover, they also indicate that a robust corporate governance structure can contribute substantially to market stability and investor confidence, enhancing profitability, as well as stakeholders' market valuation, while also being a strategic factor for the long-term competitiveness of financial institutions.

Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:scm:ejafbu:v:12:y:2024:i:2:p:136-145

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