Annotated Bibliography: Corporate Governance Impact on Banking Sector

This annotated bibliography examines the impact of corporate governance on the banking sector, drawing on five key articles. The introduction highlights the importance of corporate governance in controlling ownership separation and influencing corporate performance. The included articles explore various aspects, such as corporate governance deviance, the corporate governance of banks, bank financing and corporate governance, the impact of corporate governance, capital reserve, non-performing loans, and bank risk-taking, and the impact of corporate governance on strategic orientation. The studies utilize both secondary and primary data collection methods, employing qualitative and quantitative analyses to investigate the relationships between corporate governance practices and various outcomes, including bank performance, risk-taking behavior, and strategic orientation. The findings suggest that corporate governance mechanisms significantly influence the banking sector's performance and stability, with specific mechanisms varying across different contexts. The bibliography concludes by emphasizing the importance of corporate governance in the corporate world, especially the banking sector, and by highlighting the need for further research and refinement of governance practices to enhance bank performance.

Running Head: ANNOTATED BIBLIOGRAPHY
Annotated Bibliography
Name of the Student
Name of the University
Author Note

1ANNOTATED BIBLIOGRAPHY
Introduction
In the corporate world, a manager’s behavior can leave huge impact on the performance
of the employees. Hence, corporate governance is a way of controlling the ownership
separation. The responsibility of corporate governance is to separate the roles, channels of
communication, boards of directors, the CEO which handles the operations in the workplace. In
these terms, the performance in a corporate sector can be highly influenced by the corporate
governance. This particular paper will present five articles associated to a vast corporate sector
that is the banking sector, through which the theories and practices related to corporate
governance and corporate performance will be explored.
Aguilera, R.V., Judge, W.Q. and Terjesen, S.A., 2018. Corporate governance
deviance. Academy of Management Review, 43(1), pp.87-109.
The primary purpose of the authors in this article is to develop a clear concept of corporate
governance deviance. It also explores the question of why, how and when a particular firm
adopts the practices of governance which do not align to the prevailing logic of governance. The
authors suggest a type of middle range theory that is associated with the antecedents of the
literature of the corporate governance deviance. The authors also draw on the institutional theory
along with the entrepreneurship literature. The man argument of the paper hovers around the
topic of discretion in the corporate governance practices. The findings of the article suggest that
by adopting a deviant corporate governance practices can regulate the environment of a firm’s
capacity of corporate governance. The article is based on secondary data collection and
thematically analyses the collected data. It concludes with an advanced typology of corporate

2ANNOTATED BIBLIOGRAPHY
governance deviance founded on a firm’s entrepreneurial identity. As a limitation of the article, it
can be said that it lacks the most recent updates on the mentioned topics.
De Haan, J. and Vlahu, R., 2016. Corporate governance of banks: A
survey. Journal of Economic Surveys, 30(2), pp.228-277.
The aim of the paper is to review the existing empirical literature regarding the methods of
corporate governance on the banking corporate sector. The authors have started by highlighting
the basic differences between the non-financial firms and banks having focused more on the
three characteristics which make the bank special. These are the capital structure, the regulations
and the opacity of the business structure. The three governance mechanisms are also reviewed
such as ownership structures, boards and executive compensation. The data collection and data
analysis are based secondary data collection. The method is the qualitative research method. The
findings suggest that few empirical regularities evident in the non –financial institutions are not
applicable for the banks. Hence, there is no clear conclusive result that is the limitation of the
study. However, the potential explanation of the mixed results is discussed in the article.
Qian, M. and Yeung, B.Y., 2015. Bank financing and corporate
governance. Journal of Corporate Finance, 32, pp.258-270.
This particular article aims at exploring the bank monitoring and which improves the corporate
governance. This paper delineates that the inefficiencies in the performance of banking can
efficiently reduce the disciplinary power of the equity capital market. Specifically, the article
shows that in such an environment, where the banking sectors is controlled by the hollowed
state-controlled banks, a firm’s bank loan access is positively connected with the shareholders’
tunneling control. Companies with the higher rates of tunneling can persistently receive

3ANNOTATED BIBLIOGRAPHY
compatible interest costs and good loans. The article’s findings further show that by the
tunneling, the future performance of the firm can be negatively connected with financing in the
banks. The data collection method used in this article is secondary data collection method and
the analysis is done with various statistical graphs and diagrams. The limitation of the article is
that it is limited only in the banking sector (although it is a vast corporate sector). The article
concludes with suggesting that in order to develop mature capital markets in an economy, the
banking efficiency is required to be improved because the monitoring role of the market is
diluted by the inefficiency.
Lestari, D., 2018. Corporate Governance, Capital Reserve, Non-Performing
Loan, and Bank Risk Taking. International Journal of Economics and
Financial Issues, 8(2), pp.25-32.
The aim of this study is to analyze the impacts of corporate governance, corporate risk taking,
non-performing loan, capital reserve that is listed in the Stock Exchange of Indonesia from the
year 2009 to 2016. The article suggests that the corporate governance reflects the decision
making of management along with the policies of bank management. These policies are related
to the corporate risks in the banking sector and also the other banking issues. The study suggests
that non-performing loans and the capital reserve indicates the financial performance of the
banks. Hence, the capital reserves are important for the comparisons of risky activities. The stud
makes good use of the data found from the Indonesian companies from 2009 -16. The sampling
method used is the purposive sampling. 27 companies in the banking sector shape the research
purpose. The analysis of the data is done by the descriptive statistics and the correlation of the
matrix with tables. The findings suggest that the concentration in the ownership, the non-

4ANNOTATED BIBLIOGRAPHY
performing loans, the big-four audit committee leave impact negatively on the risk taking of this
corporate sector. The conclusion suggests that on the bank risk taking, the capital reserve is not
that significant statistically.
Al-Zu’bi, H.A. and AL-Zoubi, M.G., 2016. Corporate Governance and Its
Impact in Determining the Strategic Orientation. International Journal of
Academic Research in Business and Social Sciences, 6(5), pp.427-436.
The primary purpose of this particular paper is to identify the impacts of corporate governance
on defining the strategic orientations in the Islamic banks of Jordan. The research is based on the
primary data collection and sampling from the three selected banks of Jordan. In order to
maintain the quality of the research results extracted, the 168 people from the senior
management positions are selected. The results of the study suggest that there is a deep
connection between the strategic orientation and corporate governance. It also leaves significant
impact on the variables of corporate governance in the Islamic banks. The collected data is
analyzed through tables and diagrams. The questionnaire method is used for examination and the
articles concludes with recommending that enhancing the workplace environment in the
corporate world especially the banking sector through enriching the culture can help to realize
the huge benefits of the corporate governance.
Conclusion
On a concluding note, it can be said that the corporate governance is an integral part of
the corporate performance which is beneficial most of the times. The style of governance differs
from sector to sector and firm to firm. However, this paper has well documented five articles

5ANNOTATED BIBLIOGRAPHY
associated to a vast corporate sector that is the banking sector for exploring the theories and
practices of corporate governance and corporate performance.

6ANNOTATED BIBLIOGRAPHY
Bibliography
Aguilera, R.V., Judge, W.Q. and Terjesen, S.A., 2018. Corporate governance deviance. Academy
of Management Review, 43(1), pp.87-109.
Al-Zu’bi, H.A. and AL-Zoubi, M.G., 2016. Corporate Governance and Its Impact in Determining
the Strategic Orientation. International Journal of Academic Research in Business and Social
Sciences, 6(5), pp.427-436.
De Haan, J. and Vlahu, R., 2016. Corporate governance of banks: A survey. Journal of Economic
Surveys, 30(2), pp.228-277.
Lestari, D., 2018. Corporate Governance, Capital Reserve, Non-Performing Loan, and Bank Risk
Taking. International Journal of Economics and Financial Issues, 8(2), pp.25-32.
Qian, M. and Yeung, B.Y., 2015. Bank financing and corporate governance. Journal of
Corporate Finance, 32, pp.258-270.