Speaker
Description
This paper aims to investigates the impact of Risk Management Commitments (RMC) independence on the financial performance of commercial banks in Malaysia. The financial performance of a commercial bank is measured by using Return on Assets (ROA). The paper examines RMC independence that quantified by the proportion of independent members within RMC along with Bank size (Total assets) and Leverage ratio (Debt-to-Equity Ratio) as independent variables. By utilizing a quantitative research design and panel data analysis, data spanning from 2018 to 2023 sourced from annual reports of commercial banks in Malaysia. The findings underscore the critical role of RMC independence in shaping financial outcomes, independent of bank size and leverage. Empirical result indicates a significant correlation between higher levels of RMC independence and financial performance as measured by ROA. This paper contributes to the existing literature by highlighting the importance of corporate governance structures in enhancing bank profitability. The practical implications suggest that enhancing RMC independence might improve the effectiveness of risk management, thereby fostering sustainable financial health in commercial banking in Malaysia. This paper presents empirical evidence on the relationship between RMC independence and financial performance in offering insights for stakeholders and policymakers in the banking industry. The results aim to assist in making choices to enhance risk management structures and strengthen governance practices in Malaysian banks in line with regulatory requirements.
