Abstract:
This research is an attempt to analyze the impact of
corporate governance on the credit risk management
practices in the banking sector of Pakistan. Corporate
governance is a comparatively new phenomena in Pakistan,
therefore there are a lot of aspects regarding this topic
that can be discovered but are not yet been explored by
any researcher. Taking this chance, the researcher
examines the relationship between corporate governance
and the credit risk management. The study analyses this
relationship in terms of frequency of the board meetings,
the structure of the board, code of corporate governance,
training and audit committee. The empirical framework
designed is applied to the major operating banks in
Pakistan. A detailed questionnaire analysis has been
carried out to show the compliance of the financial
institutes with the code of corporate governance.
Regression and correlation analyses have been carried out
to analyze the results. The T-test shows that all the
considerable variables have some effect on the credit
risk management. The study shows that sound corporate
governance is essential for the operation of a financial
institution and has a significant impact on the credit
risk management practices of the banking sector in
Pakistan.
