Risk Governance and Financial Performance: Rural Banking Experience

The paper's goal is to examine the effect of risk governance variables on firm financial performance, with a specific focus on the rural banking sector. The paper used panel data of 67 rural banks in Ghana from 2014 to 2018. The study used the population-average model (PAM) as an estimation technique. The study's findings indicate that the size of the risk committee, its independence, and the presence of a chief risk officer have a positive and significant relationship with the financial performance of the rural banking sector. As a result, the introduction of risk governance in the banking sector tends to improve rural banking's financial performance. The study further reveals that the standard governance measures commonly used in the literature on corporate governance and its impact on performance may not fully capture the relevance of banks' governance structures.