Measuring the quality of corporate governance in the banking sector of Bosnia and Herzegovina

Abstract

A good system of corporate governance is a key prerequisite for sustainable economic growth and increased efficiency of an economic system and it guarantees easier access to foreign sources of capital. The financial system of Bosnia and Herzegovina is dominated by the banking system. The banking system is mostly owned by foreign enterprises. It is characterised by a very high level of ownership concentration and a closed system of corporate governance. A successful corporation requires efficient and successful management, as development of good practice in corporate governance is a sine qua non for corporations aiming to prosper on the market. Measuring corporate governance provides a clear overview of strengths and weaknesses of the system of corporate governance, not only for banks, but also for other enterprises. It is a foundation for a long-term sustainable and socially responsible growth and development, both of the banking system and the entire economic system of Bosnia and Herzegovina.