Enhancing Financial Stability in Ghana's Universal Banking Sector: A Governance Perspective and Practical Insights

Authors

  • Owusu Okyere Emmanuel Akenten Appiah-Menka University
  • Baafi Antwi Joseph Akenten Appiah-Menka University
  • Agyei Darkwah Portia Akenten Appiah-Menka University

DOI:

https://doi.org/10.47941/jbsm.1607

Keywords:

Corporate Governance, Financial Distress, Universal Banking, Ghana, Governance Impact

Abstract

Purpose: This study investigates the impact of corporate governance structures on financial distress within the universal banking sector in Ghana.

Methodology: The research systematically gathers data from 19 banks spanning 10-year period. Financial distress indicators were extracted from financial statements, while corporate governance measures were obtained from annual reports. The data was analysed through regression analysis and counterfactual analysis through an endogenous switching regression model.

Findings: Key findings reveal that profitability, liquidity, and effective risk management are critical factors influencing financial distress in both strong and weak governance environments. The results also showed that improving the strength of Corporate Governance has a positive influence on Altman Z Scores, contributing to a potential reduction in financial distress.

Unique contributor to theory, policy and practice: The study provides valuable insights for policymakers, regulators, and banking institutions in Ghana, emphasizing the need to prioritize and strengthen governance practices for a resilient banking sector. Limitations include data unavailability, reliance on unbalanced panel data, and a narrow focus on board characteristics.

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Author Biographies

Owusu Okyere Emmanuel, Akenten Appiah-Menka University

Department of Accounting Studies Education

Baafi Antwi Joseph , Akenten Appiah-Menka University

Department of Economics

Agyei Darkwah Portia, Akenten Appiah-Menka University

Department of Management Studies Education

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Published

2024-01-06

How to Cite

Owusu, O. E., Baafi, A. J. ., & Agyei, D. P. (2024). Enhancing Financial Stability in Ghana’s Universal Banking Sector: A Governance Perspective and Practical Insights. Journal of Business and Strategic Management, 9(1), 1–21. https://doi.org/10.47941/jbsm.1607

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