Authors :
Cosmas Kanhai
Volume/Issue :
Volume 8 - 2023, Issue 7 - July
Google Scholar :
https://bit.ly/3TmGbDi
Scribd :
https://tinyurl.com/54d354uz
DOI :
https://doi.org/10.5281/zenodo.8245625
Abstract :
The purpose of this paper is to establish the
relationship between corporate governance and the
adoption of Enterprise Risk Management by banks in
Zimbabwe.
The research was based on 26 banking institutions
in Zimbabwe and primary data on enterprise risk
management practices was collected through
questionnaires which were distributed to chief risk
officers/risk/managers of the banks. Secondary data on
corporate governance variables was collected through a
review and analysis of published financial statements of
the banking institutions for the year ended 31 December
2011.
The study results revealed that that board
independence and ownership structures are essential
elements that influence the decision to adopt ERM by
banks in Zimbabwe. However the research found that the
size of the board has no relationship with the extent of
adoption of ERM.
The research also found out that owner managed
banks (i.e. with directors’ ownership concentration) are
unlikely to adopt ERM while those with institutional
shareholders concentration are more likely to adopt
decisions to implement ERM. The study recommended
the regulatory authorities to ensure that there is
separation of ownership and management in banks to
avoid abuse of structures through overbearing influence
by ‘owner managers’
This research therefore concluded that corporate
governance has important implications on the extent of
adoption of ERM by banking institutions in Zimbabwe.
Keywords :
Corporate governance, ownership concentration, enterprise risk management, financial stability.
The purpose of this paper is to establish the
relationship between corporate governance and the
adoption of Enterprise Risk Management by banks in
Zimbabwe.
The research was based on 26 banking institutions
in Zimbabwe and primary data on enterprise risk
management practices was collected through
questionnaires which were distributed to chief risk
officers/risk/managers of the banks. Secondary data on
corporate governance variables was collected through a
review and analysis of published financial statements of
the banking institutions for the year ended 31 December
2011.
The study results revealed that that board
independence and ownership structures are essential
elements that influence the decision to adopt ERM by
banks in Zimbabwe. However the research found that the
size of the board has no relationship with the extent of
adoption of ERM.
The research also found out that owner managed
banks (i.e. with directors’ ownership concentration) are
unlikely to adopt ERM while those with institutional
shareholders concentration are more likely to adopt
decisions to implement ERM. The study recommended
the regulatory authorities to ensure that there is
separation of ownership and management in banks to
avoid abuse of structures through overbearing influence
by ‘owner managers’
This research therefore concluded that corporate
governance has important implications on the extent of
adoption of ERM by banking institutions in Zimbabwe.
Keywords :
Corporate governance, ownership concentration, enterprise risk management, financial stability.
