Risk Management Governance and Sustainable Financial Performance

Abstract

Purpose: The paper analyzes the efficacy of risk management governance, which takes the form of a dedicated risk governance committee and the executive board with the CRO. It illustrates which aspects of risk management and governance are crucial for the banks' financial performance. It also emphasizes financial sustainability through risk management and governance. Design/Methodology/Approach: A quantitative research approach is employed with secondary data from published and reliable sources. Regression analysis is employed for estimating the impact, and a t-test is performed for estimating the difference. Findings: It concludes that the financial performance measured using returns ratio significantly differs among the banks with the executive board having a CRO and the executive board having an absence of a CRO. The financial performance variable taken as a function of the bank's corporate governance variables assumes a positive and significant impact. It infers that risk governance can lead to sustainable financial performance. Research Limitations and Implications: This study contributes to the risk governance structure of banks. The future work should consider different samples and extended risk-based variables for more implications. Originality: The banks performance with a risk management approach in South Asian economies after the global crisis is a valuable addition to the corporate governance of banks in the studied countries. The comparative analysis of banks with and without the role of the CRO is a unique contribution in the provided setting.