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Internal Mechanisms of Governance and Risk Bearing of Banks: The Case of the CEMAC Zone

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  • Etienne Fran?ois Eloundou
  • Doris Mireille Befen Djinja

Abstract

This work tries to study the relationship between the internal mechanisms of governance and the bearing of financial risk by 20 banks in the CEMAC region during the period 2007-2013. The results suggest that a small size of the board of directors enables the exercise of managerial control, institutional and foreign directors do not have a significant impact on risk bearing contrary to theoretical predictions whereas public directors have a positive and significant impact on risk bearing. The size of the bank as well as it¡¯s capitalisation tend to reduce risk bearing translating an effect of accumulation of experience and diversification of activities as well as bank capitalisation. On the contrary ownership structure has no significant impact on risk taking.

Suggested Citation

  • Etienne Fran?ois Eloundou & Doris Mireille Befen Djinja, 2016. "Internal Mechanisms of Governance and Risk Bearing of Banks: The Case of the CEMAC Zone," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 7(5), pages 190-202, October.
  • Handle: RePEc:jfr:ijfr11:v:7:y:2016:i:5:p:190-202
    DOI: 10.5430/ijfr.v7n5p190
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