Corporate Governance and Bank Performance An International Comparison: Vietnam and Malaysia

Abstract

Corporate governance has become one of the most popular phenomena that draw the worldwide attention recently as this issue has significant influences on the performance of almost every business. Regarding banking industry, the adoption of good corporate governance is much more vital, because a smooth and well-performed banking system lies at the heart of economic development in each country. This paper is to provide a deep look into the relationship between corporate governance and performance of banking sector, especially in two countries, namely Vietnam and Malaysia by presenting both theoretical framework and empirical study. The part of theoretical framework provides readers with profound knowledge about corporate governance in general as well as bank corporate governance in particular with two famous frameworks. In the empirical study section, a number of commercial banks in Vietnam and Malaysia have been randomly chosen as a sample to run econometric models which examine the effect of several variables of corporate governance on the bank performance. The overall result of study shows that board size, audit committee size, and capital adequacy ratio has a significant effect on both Vietnamese and Malaysian commercial banks and there exists the difference in the influence of some corporate governance proxies on the bank performance between Vietnam and Malaysia.