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The risk and returns effects of corporate governance and funding strategy of banks in Ghana

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  • Felix Gariba
  • Mohammed Amidu
  • William Coffie

Abstract

This paper examines the effects of corporate governance mechanisms and funding strategy on risk and returns of banks in Ghana. We employ a panel dataset of banks from 2000 to 2014, to further shed light on funding modes and performance nexus by analysing the complex interaction between corporate governance, funding strategy, and risk and return. The paper establishes among others, a positive and significant relationship between executive compensation and bank returns implying that appropriate compensation to executive members of banks may improve bank performance and reduce bank risk exposure. The overall implication of this result is that improvements in corporate governance practices ensure more transparent method in determining board structure as well as in setting executive compensation for increased bank returns.

Suggested Citation

  • Felix Gariba & Mohammed Amidu & William Coffie, 2018. "The risk and returns effects of corporate governance and funding strategy of banks in Ghana," African Journal of Accounting, Auditing and Finance, Inderscience Enterprises Ltd, vol. 6(2), pages 154-175.
  • Handle: RePEc:ids:ajaafi:v:6:y:2018:i:2:p:154-175
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