Corporate Governance In Banks Undergoing Merger And Acquisition.

Abstract

This nine page paper on Corporate Governance In Banks Undergoing Merger And Acquisition presents a case on banks that have recently undergone the process of M&A in Pakistan and the steps these banks should take in order to encompass corporate governance to ensure higher profitability and employees' satisfaction. Effective corporate governance involves a set of relationships between a company's management, its board, its shareholders and other stakeholders. It is also about promoting corporate fairness, transparency and accountability. Banks can easily safeguard their risk exposures and build their sustainable competitive advantage via imposing corporate governance. This paper also explains the six key tools of corporate governance that can be used by banks to counter problems that are evident during M&A.

Corporate Governance In Banks Undergoing Merger And Acquisition

A lot of attention has been targeted towards the issue of corporate governance in various Pakistani banks since they are a crucial component of the country's economy.

English: Board of Directors

English: Mawarid Board of Directors

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Banks that encompass good corporate governance succeed in attracting a good deal of public interest because of its apparent importance for the economic health of the organization. Corporate governance is extremely vital particularly, for those banks that are recently undergoing the process of merger and acquisition in Pakistan.

Banking sector in Pakistan has transformed within a short period of five years from a government dominated sector to a much more agile, competitive and profitable industry. In order for banks to continue growing and running profitably, they must incorporate good corporate governance practices. Effective corporate governance involves a set of relationships between a company's management, its board, its shareholders and other stakeholders. It also promotes corporate fairness, transparency and accountability.

Research has suggested that historically, merger and acquisition often failed to add importance to the value of the acquiring firm's shares since...