Journal of Accounting and Management Information Systems (JAMIS)

Corporate governance in the banking industry

Vol. 9, Nr. 3/2010 ,   p379..402

Eugeniu ŢURLEA
Mihaela Mocanu
Carmen Radu

Keywords:   internal audit, external audit, audit committee, banks, corporate governance


Corporate governance is a highly debated topic, both at national leveland at international level, the mere definition of the concept of “corporategovernance” being subject of controversy. Due to the importance of this field,both the national and the international literature comprise a diversity ofstudies on corporate governance: conceptual, empirical, normative etc. However,the particular topic of corporate governance in the banking industry has notreceived the well-worth attention. Although the issues related to corporategovernance in the banking industry do not differ essentially from the issuesrelated to the governance of any entity whose activity involves trading ofgoods or services, certain characteristic features can be identified, due tothe particularities of the banking sector. The reason for such particularitiesof corporate governance in banks is the fact that banks play a central rolewithin the economy and are subject of stricter regulations in comparison withother entities. Moreover, the activity in the banking industry is characterizedby the complexity of operations, which increases the information asymmetry anddiminishes the stakeholders’ capacity to monitor the decisions of bankmanagers. The present paper’s objectives are threefold: (1) to define corporategovernance in a banking context; (2) to analyze the role and significance ofthe banking sector; (3) to identify some characteristics of corporategovernance in banks and to emphasize that there is and it should be arelationship of complementarity between the main corporate governancemechanisms (internal audit, audit committee, and external audit).