The Effect of Corporate Governance on Bank Credit Risk: The Case of Listed Banks in Ghana
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Date
2021
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KNUST
Abstract
The study sought to assess the corporate governance of commercial banks and the impact it has on the credit risk of listed commercial banks within the country. The study specifically sought to assess the impact of board composition, board size, board independence, board meeting frequency and the CEO duality on the credit risk of the banks. In all, eight commercial banks were used for the study and data was collected from the annual reports of these selected listed commercial banks. The study was conducted based on five years. In the analysis of the data gathered from the annual reports of the banks, descriptive, correlation and regression techniques were adopted for the study. The findings of the study showed that there was no positive significant relationship between most of the corporate governance variables (board composition, board frequency meeting, independence of the director and CEO duality) and the credit risk of the banks. However, only board size demonstrated a significantly negative effect on credit risk. Despite the results of the analysis showing that there was correlation between three of the corporate governance components and the credit risk of the bank, the relationship was not significant. The study recommended that there is a need for an overhaul of the banking laws to further interpret the corporate governance rules to the commercial banks and there is the need for similar studies to be conducted in other sectors.
Description
A thesis submitted to the department of accounting and finance, college of humanities and social sciences in partial fulfilment of the requirements for the master’s degree in accounting with finance.