Corporate Governance for Credit Establishments in the CEMAC Region

Abstract

Considering the banking crises around the world and in particular in the CEMAC region in the 1980s that led to massive collapse of many financial institutions for most part caused by a total absence of the application of good practices in matters of Corporate governance, corporate governance regulations and implementation has become very vital in all financial institutions. The main objective to the study is to assess how effective these corporate governance legal principles and practices for credit establishments in the CEMAC Region are implemented. More specifically, in order to come out with solutions to the numerous shortcomings in corporate governance practices observed in the regulatory system applicable, it investigates the extent of the effectiveness in the implementation and supervision of corporate governance practices in credit establishment in the CEMAC region. To achieve this objective, the study undertakes a Comprehensive literature review from previous authors on certain aspects concerning the topic to bring out the gap. It then adopts a qualitative approach to obtain primary and secondary data to use for the analysis. The major finding is that though the regulators have put in place very good and specific governance requirements for credit establishments with regular periodic supervision from COBAC; governance mal practices still persist at an alarming rate due to factors like some failures in the supervision of credit establishments as well as inadequate mastery of the numerous COBAC regulations by some credit establishments. We recommend adequate attention by credit establishments to corporate governance because of the importance of corporate governance in enhancing performance and reducing corporate risk. We equally recommend a better follow up of the credit establishments by COBAC and the establishments themselves to ensure adequate fulfillment of the governance requirements.