Assessing the Role of Corporate Governance Structures in Shaping Ethical Decision-Making and Risk Management Approaches in Financial Institutions
Keywords:
corporate governance, ethical decision-making, risk management, financial institutions, board structure, compliance, ethicsAbstract
This paper investigates how corporate governance (CG) structures influence ethical decision-making and risk management within financial institutions. By exploring the mechanisms through which boards, audit committees, and ownership structures affect organizational behavior, the paper seeks to illuminate the integral role of governance in aligning institutional goals with societal expectations. Using a mixed-methods review of recent studies and organizational data, we assess key relationships between governance configurations and ethical/risk outcomes in finance. The findings suggest a strong correlation between board independence, gender diversity, and regulatory compliance with improved ethical and risk-based performance.
References
Aguilera, Ruth V., and Alvaro Cuervo-Cazurra. "Codes of Good Governance." Corporate Governance: An International Review, vol. 17, no. 3, 2009, pp. 376–387.
Adams, Renée B., and Daniel Ferreira. "Women in the Boardroom and Their Impact on Governance and Performance." Journal of Financial Economics, vol. 94, no. 2, 2009, pp. 291–309.
Bebchuk, Lucian A., and Michael S. Weisbach. "The State of Corporate Governance Research." The Review of Financial Studies, vol. 23, no. 3, 2010, pp. 939–961.
Basel Committee on Banking Supervision. Corporate Governance Principles for Banks. Bank for International Settlements, 2015.
Cumming, Douglas, T. Y. Leung, and Oliver Rui. "Gender Diversity and Securities Fraud." Academy of Management Journal, vol. 58, no. 5, 2015, pp. 1572–1593.
Donaldson, Thomas, and Lee E. Preston. "The Stakeholder Theory of the Corporation: Concepts, Evidence, and Implications." Academy of Management Review, vol. 20, no. 1, 1995, pp. 65–91.
Erkens, David H., Mingyi Hung, and Pedro Matos. "Corporate Governance in the 2007–2008 Financial Crisis: Evidence from Financial Institutions Worldwide." Journal of Corporate Finance, vol. 18, no. 2, 2012, pp. 389–411.
Fama, Eugene F., and Michael C. Jensen. "Separation of Ownership and Control." Journal of Law and Economics, vol. 26, no. 2, 1983, pp. 301–325.
Kaptein, Muel. "Developing and Testing a Measure for the Ethical Culture of Organizations: The Corporate Ethical Virtues Model." Journal of Organizational Behavior, vol. 29, no. 7, 2008, pp. 923–947.
Minton, Bernadette A., Jérôme P. Taillard, and Rohan Williamson. "Financial Expertise of the Board, Risk Taking, and Performance: Evidence from Bank Holding Companies." Journal of Financial and Quantitative Analysis, vol. 49, no. 2, 2014, pp. 351–380.
OECD. G20/OECD Principles of Corporate Governance. OECD Publishing, 2015.
Solomon, Jill. Corporate Governance and Accountability. 3rd ed., Wiley, 2010.
Downloads
Published
Issue
Section
License
Copyright (c) 2025 Emily Johnson (Author)

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.