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The Correlation between Corporate Governance and Financial Performances in the Romanian Banks

In: Current Issues in Corporate Social Responsibility

Author

Listed:
  • Alina Georgiana Manta

    (University of Craiova)

  • Roxana Maria Bădîrcea

    (University of Craiova)

  • Ramona Pîrvu

    (University of Craiova)

Abstract

This study examines the impact of corporate governance on the financial performances of the banks. For this purpose, we compiled a database including 23 commercial banks in Romania. Starting from a vast reference literature there were identified three characteristics of the board (dimension, the structure from the point of view of the womenWomen and of the non-residentsNon-residents ) which might have an impact on the financial performance and these characteristics were used as independent variablesIndependent variables . The Ordinary Least Squares (OLS) regression from Eviews was used to estimate the relationship between bank performance measures and the independent variables. After the empiric testing, the hypotheses considered within the theoretical section were accepted. Within the first econometric model, the size of the board represented by the supervisory boardSupervisory board and the executive boardExecutive board determined a positive and significant impact on the performance. One showed that a numerous board contributes to the increase of the financial value of the considered banks because it assures an efficient supervisory. The second considered model enforced the results provided by the first model, so that the structure of the board Board structure determines a positive effect on the performance by means of the non-resident members (the conflicts of interestInterest are reduced) and the presence womenWomen in managementManagement (new ideas and approaches).

Suggested Citation

  • Alina Georgiana Manta & Roxana Maria Bădîrcea & Ramona Pîrvu, 2018. "The Correlation between Corporate Governance and Financial Performances in the Romanian Banks," CSR, Sustainability, Ethics & Governance, in: Samuel O. Idowu & Catalina Sitnikov & Dalia Simion & Claudiu George Bocean (ed.), Current Issues in Corporate Social Responsibility, pages 165-182, Springer.
    • Handle: RePEc:spr:csrchp:978-3-319-70449-4_11
    DOI: 10.1007/978-3-319-70449-4_11
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    Cited by:

    1. Pompei MITITEAN, 2023. "The Relationship Between Corporate Governance Mechanisms and Financial Institution Performance. A COVID-19 Perspective," CECCAR Business Review, Body of Expert and Licensed Accountants of Romania (CECCAR), vol. 3(12), pages 55-65, December .
    2. Nina Sinitin & Adela Socol, 2021. "Does the Disclosure of Performance Indicators Impact Bank Profitability? Empirical Study for the Romanian Banking System," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(2), pages 1153-1160, December.

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