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Investigating the Compliance rate of Iranian Banks with Indicators of Corporate Governance Model

Author

Listed:
  • Babajanei , Jafar

    (Allameh Tabataba'i University)

  • Barzideh , Farrokh

    (Allameh Tabataba'i University)

  • Naeimi , Abootaleb

    (Allameh Tabataba'i University)

Abstract

Corporate Governance debates raised seriously in scandals and financial crisis of recent decades in large companies and banks. The focus of this debate is not merely the corporate governance system, and its main function is to preserve the interests of stakeholders. At the macro level, economic efficiency, sustainable growth and financial stability are important effects of the system. Establishing an efficient corporate governance system in the banking system and evaluating and ranking them requires a comprehensive model that encompasses all the internal and external mechanisms affecting corporate governance and localized indices and relevant international principles. In this research, corporate governance in banks has been evaluated via a model developed in the framework of systematic thinking which includes three dimensions 1)Inputs (structures and inputs), 2)Roles and processes, and 3) Outputs (goals, performance and results of them). The main objectives of this study are to evaluate the compliance status of 27 banks with the indicators of corporate governance model and their efficiency and effectiveness, as well as to examine the correlation between the components of corporate governance within the system including inputs, processes and outputs. According to the results, 47.8% of the qualitative indicators are covered in the current situation of the banks of the country, but there is a significant gap between the full compliance with the model. Based on the results in the performance sector, private banks scored the highest and state banks scored the lowest. The results of evaluating the correlation between the components of corporate governance model showed that there is a positive and significant relationship between the dimensions of inputs and processes with the goals, results and performance of banks. Accordingly, by improving the status of input indicators and the corporate governance model process, the status of target indicators, results and performance of banks will also improve

Suggested Citation

  • Babajanei , Jafar & Barzideh , Farrokh & Naeimi , Abootaleb, 2018. "Investigating the Compliance rate of Iranian Banks with Indicators of Corporate Governance Model," Journal of Money and Economy, Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran, vol. 13(4), pages 443-469, October.
    • Handle: RePEc:mbr:jmonec:v:13:y:2018:i:4:p:443-469
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    References listed on IDEAS

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    1. Art Durnev & E. Han Kim, 2005. "To Steal or Not to Steal: Firm Attributes, Legal Environment, and Valuation," Journal of Finance, American Finance Association, vol. 60(3), pages 1461-1493, June.
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    4. Wang, Wei-Kang & Lu, Wen-Min & Lin, Yi-Ling, 2012. "Does corporate governance play an important role in BHC performance? Evidence from the U.S," Economic Modelling, Elsevier, vol. 29(3), pages 751-760.
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    More about this item

    Keywords

    Corporate Governance; Model; Banking Performance;
    All these keywords.

    JEL classification:

    • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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