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The Relationship Between Corporate Governance Mechanisms and Financial Institution Performance. A COVID-19 Perspective

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  • Pompei MITITEAN

    (Bucharest University of Economic Studies, Romania)

Abstract

This article assesses the possibility of a relationship between corporate governance mechanisms and financial institutions performance in an emerging country such as Romania. The sample consists of 30 financial institutions and the data were collected manually from the annual reports. The size of the board, the size of the executive board, the diversity of the gender of the board, the duality of the CEO and the size of the audit committee were chosen as metrics for corporate governance, while ROA and ROE were chosen as metrics for financial performance. The SPSS statistical program was used to run the regression model on the selected sample. We found mixed results. The regression results suggest that board size, executive board members, and CEO duality support hypotheses H1, H2 and H4 and have a positive impact on the firm’s performance, both measured by ROA and ROE. Therefore, hypotheses H3 and H5, regarding an association between board gender diversity and audit committee size and financial institution performance, are rejected, having a negative impact during an uncertain time on ROA and ROE. The results contribute to the existing literature and may help the third parties to better understand the correlations between corporate governance mechanisms and the performance of the financial institutions.

Suggested Citation

  • 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 .
    • Handle: RePEc:ahd:journl:v:3:y:2023:i:12:p:55-65
    DOI: 10.37945/cbr.2022.12.06
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    More about this item

    Keywords

    corporate governance; financial performance; emerging European country; financial institution;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G39 - Financial Economics - - Corporate Finance and Governance - - - Other

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