Impact of Corporate Governance on Banks Performance

Weak and ineffective corporate governance mechanisms in banks are pointed out as the main factorscontributing to the recent financial crisis. Deep changes in this area are necessary to reinforce thefinancial sector stability. The purpose of this study is to survey the relationship between corporategovernance mechanisms and Iranian listed banks performance during the years 2010-2015. Thedependent variable of this study is financial performance of banks. That is a function of capital adequacy.According to CAMEL rating system, a high capital adequacy ratio is a symbol of healthy activity ofbanks and has a great weight on CAMEL rating. The independent variables are included the size of theboard, the proportion of independent directors, the proportion of ownership of Institutional shareholders,the proportion of ownership of major shareholders and separation between CEO and chairman. Aftercollecting data, we have used descriptive and regression model for analyzing data. The model for testingthe hypothesis is multiple linear regressions. The result of this study according to multiple regressionshows that only the proportion of ownership of Institutional shareholders have a positive impact onCapital Adequacy of banks and there is not any relationship between other independent variables andcapital adequacy of banks.

کلیدواژه ها:

Corporate Governance ، Board Size ، Non-Executive Directors ، Ownership Structure ، Institutional Shareholders ، Separating the Role of CEO and Chairman ، Performance