IJFANS International Journal of Food and Nutritional Sciences

ISSN PRINT 2319 1775 Online 2320-7876

CORPORATE GOVERNANCE PRACTICES IN BANKING INSTITUTIONS

Main Article Content

P.Nagendra Swamy

Abstract

This study explores the corporate governance practices in banking institutions. Corporate governance practices in banking institutions are pivotal for ensuring stability, transparency, and ethical conduct within the financial sector. Effective corporate governance in banking begins with a well-structured board of directors, comprising independent members who provide oversight and strategic guidance. Clear separation of roles between the CEO and Chairman ensures balanced decision-making and accountability. Specialized committees, such as those for audit, risk management, and remuneration, further enhance governance by focusing on specific areas of oversight. Risk management is paramount in banking, encompassing comprehensive frameworks for identifying, assessing, and mitigating risks like credit, market, and operational risks. A dedicated Chief Risk Officer (CRO) oversees these efforts, ensuring that risk considerations are integrated into strategic decisions and reported to the board or relevant committees. Regulatory compliance is another cornerstone, with banks adhering to stringent local and international regulations such as Basel III. Transparent reporting and robust internal controls are essential to maintain regulatory alignment and trust among stakeholders. Ethical standards and a strong corporate culture are fundamental to governance, promoting integrity and accountability at all levels. Executive compensation policies should align with long-term performance and risk management objectives, supported by transparency and accountability measures. Engagement with stakeholders—including shareholders, customers, employees, and regulators—is crucial for understanding diverse perspectives and maintaining trust. Additionally, embracing technological innovation while managing associated risks is essential for competitiveness and operational efficiency. In conclusion, robust corporate governance practices in banking institutions not only ensure compliance and mitigate risks but also foster trust, resilience, and sustainable growth in a complex and dynamic financial environment.

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