The Influence of Internal Corporate Governance on Bank Performance - An Empirical Analysis for Romania

AbstractThis study investigates, based on empirical analysis, the influence of internal corporate governance on bank performance within the Romanian banking sector, including the characteristics of the management body, ownership structure and an internal corporate governance index. The internal corporate governance index was built to reflect the corporate structure, the structure of committees, the risk management and the internal control framework and the institutional transparency. The results after processing the data collected from the websites of credit institutions, using the multiple regression model, mainly, indicates the following: (1) internal corporate governance index influenced negatively the bank performance, determining the need to improve and countercyclicaly implement the measures of corporate governance, (2) the need to increase the number of independent members within the management body and (3) the need to change the business behaviour of shareholders in order to reduce exposure to risks