The Impact of Internal Corporate Governance Mechanisms on the Unsystematic Risks at Jordanian Commercial Banks Listed on the Amman Stock Exchange

Abstract

The aim of this research is to investigate the relationship between Internal corporate governance mechanisms and on the unsystematic risks using data from 13 commercial banks listed on the Amman Stock Exchange during the period 2009-2016. Panel data was utilized and the data gathered from 104 annual reports from13 commercial banks in Amman, which analyzed using descriptive statistics, correlation, and regression. Seven main corporate governance variables were analyzed in terms namely: (Board size, Board Independence, CEO /Chairman Separation, Audit Committee Independence, Ownership concentration, Institutional Ownership, and Foreign Ownership) their relative of the unsystematic risk (credit risk, liquidity risk, and operational risk). furthermore, bank size and debt Ratio were used as a control variable. Based on the results of the study, it has been observed that Internal corporate governance mechanisms variables have a significant effect on the unsystematic risk.

Keywords: Corporate Governance, Unsystematic Risk, Panel Data.

DOI: 10.7176/RJFA/10-18-01

Publication date:September 30^th 2019