Assessing the effect of corporate governance principles on the financial health of banks

Document Type : Original Article

Authors

1 Department of Accounting, Allameh Tabatabai University, Tehran, Iran

2 Department of Accounting, Allameh Tabatabaei University, Tehran, Iran

10.30510/psi.2022.312686.2561

Abstract

This study evaluates the effect of corporate governance on the financial health of banks. In order to measure Eight components, (including the level of disclosure and transparency, efficiency of risk management processes, compliance with rules and regulations, board and composition, the status of the employee service compensation system, internal audit processes, the quality of group structures, and the characteristics of board of directors) and the financial health of banks, CAMELS model and a questionnaire on bank financial health were used. The statistical population of this research includes 85 people who work in the Stock Exchange Banks. This research has been done for the main hypothesis of multiple regression method by GMM method using financial statements and information of stock exchange banks during the period 1396 to 1398. The results shows that the level of disclosure and transparency, efficiency of risk management processes, compliance with rules and regulations, board and composition, the status of the employee service compensation system, internal audit processes, the quality of group structures, and The characteristics of board of directors have a direct impact on the financial health of banks; therefore, with the establishment of a good corporate governance system, the financial health of banks will be improved.

Keywords

Political Sociology of Iran
Volume 5, Issue 12
February 2023
Pages 2201-2223

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