CORPORATE GOVERNANCE REFORMS AND FINANCIAL STABILITY: AN EMPIRICAL ANALYSIS OF BANKING SECTOR PERFORMANCE
DOI:
https://doi.org/10.66795/jafep43Keywords:
Corporate governance, Financial stability, Banking performance, Board independence, Risk management, Z-scoreAbstract
This study investigates how corporate governance reforms influence financial stability and performance in the banking sector. Drawing on agency theory and risk-governance perspectives, the research links governance quality— such as board independence, audit effectiveness, ownership structure, and risk committee strength—to bank stability and profitability. Using panel data methods suitable for banking (e.g., fixed effects and dynamic GMM to address endogeneity), the study models stability through Z-score and asset quality indicators, and performance through ROA/ROE and efficiency metrics. The findings are expected to show that stronger governance frameworks improve oversight, reduce excessive risk-taking, enhance capital discipline, and strengthen resilience against macro financial shocks. Policy implications highlight the role of regulators and bank boards in institutionalizing transparent governance practices to support sustainable financial intermediation and systemic stability.
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Copyright (c) 2025 Zunaira Akram , Hamza Iqbal (Author)
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