Investigating the Impact of the Corporate Governance System on the Iran's Banking Industry Soundness in the Framework of the CAMELS Model

NOBAKHT, Javad; Haji, Gholamali; Memaranjad, Abbas; Sarlak, Ahmad

doi:10.30473/jier.2024.71334.1453

Document Type : applicative

Authors

¹ PhD student, Department of Economics, Arak Branch, Islamic Azad University, Arak, Iran,

² Associate Professor, Department of Economics, Arak Branch, Islamic Azad University, Arak, Iran.

³ Assistant Professor, Department of Economics, Science and Research Branch, Islamic Azad University, Tehran, Iran

⁴ Assistant Professor, Department of Economics, Arak Branch, Islamic Azad University, Arak, Iran.

10.30473/jier.2024.71334.1453

Abstract

In this study, the effect of the components of the corporate governance system on the financial soundness of 12 banks in Iran during the period 2006-2023 was investigated using unbalanced panel data and fixed effects. In the present study, the CAMELS composite index has been used as a representative of the banking soundness index. The survey results have shown that among the corporate governance system's components, only the independent directors variable has a positive effect on the financial soundness. In contrast, the size of the board of directors, the number of meetings of the board of directors, the number of meetings of the audit committee, the duality of the CEO, and the number of meetings of the risk monitoring committee have a negative impact on the financial soundness of banks. In general, it can be expressed that the corporate governance system does not have a desirable effect on the financial soundness of the studied banks in Iran, which can be caused by the lack of real establishment of the corporate governance system in the country's banking system, especially in private and privatized banks, the absence of a correct strategy, corporate governance, lack of monitoring mechanisms, lack of proper transparency and effective accountability regarding information disclosure, poor management of assets and liabilities, etc.

Keywords

Main Subjects

Industrial Economics, Structure_Conduct-Performance

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Journal of Industrial Economics researches

Investigating the Impact of the Corporate Governance System on the Iran's Banking Industry Soundness in the Framework of the CAMELS Model

References

References

Volume 8, Issue 27
April 2024
Pages 83-98

Investigating the Impact of the Corporate Governance System on the Iran's Banking Industry Soundness in the Framework of the CAMELS Model

References

References

Volume 8, Issue 27April 2024Pages 83-98

Volume 8, Issue 27
April 2024
Pages 83-98