The purpose of this study is to assess the effect of corporate governance on risk management of banks in Ghana. The study also employed an explanatory research approach to comprehend the connection between corporate governance and risk management across Ghanaian banks. The quantitative research strategy was employed. To analyze data …
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The purpose of this study is to assess the effect of corporate governance on risk management of banks in Ghana. The study also employed an explanatory research approach to comprehend the connection between corporate governance and risk management across Ghanaian banks. The quantitative research strategy was employed. To analyze data from all eleven banks listed on the Ghana Stock Exchange, the study used a cross-sectional time series approach. General least square (GLS) regression models with fixed and random effects were used in the investigation, which was based on the outcomes of the Hausman (1978) specification test. Examining the relationship between ownership structure and risk management of banks in Ghana, it was revealed that institutional ownership is positively associated with banks risk management specifically liquidity risk (LIDRK). In addition, state ownership showed no relationship with risk management. That is both liquidity risk and capital risk, suggesting that state ownership of a bank has no effect on risk management. On the issue of board structure, the results revealed that board size is positively associated with risk management (liquidity risk). The study recommends that shareholders must review the banks’ governing board to include more bank experts to serve as a control mechanism and enhance risk management. Thus, bank expert can provide useful knowledge and experience from their own industry to help in the bank’s risk management. Furthermore, institutional shareholders must perform their monitory role well. BOG should come out with policies that will ensure that growing banks still peruse proper risk management.
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