Corporate Governance, Managerial Ownership and Credit Risk in Islamic Banks

A good corporate governance and managerial ownership can strengthen financial stability and reduce bank risk. We investigate how corporate governance and managerial ownership affect credit risk in listed Islamic banks working in Asian countries by taking sample size from 2011 to 2023. We employ fixed effect technique for analyzing the study data. We find that board structure such as board size, board independence, and board meetings have significant and negative effects on credit risk. However, high managerial proportion of ownership has incentive to decrease credit risk of banks.