“Whoa! It's like Spotify but for academic articles.”

Instant Access to Thousands of Journals for just $40/month

Get 2 Weeks Free

Financial distress and corporate governance in Zimbabwean banks

Purpose – The purpose of this paper is to investigate the relationship between corporate governance failures and financial distress in Zimbabwe's banking sector. Design/methodology/approach – The study uses the case study method. It discusses cases of banks currently in financial distress. Data collection was through desk research. The analysis is qualitative. Judgemental sampling was used in selecting the eight abridged cases. Findings – In all cases of pronounced financial distress, either the chairman of the board or the chief executive wields disproportionate power in the board. The disproportionate power emanates from major shareholding. The overbearing executive overshadows other directors, executive and non‐executive, thus creating power imbalance in the board. The study shows that financial institutions in Zimbabwe (as cited in abridged cases) underestimated the competitive forces that resulted from first, economic deregulation and later economic decline coupled with political meltdown. In order to survive, banking institutions significantly shifted from their core business. In all cases the institutions ended up engaging in financial and accounting imprudence. The study also shows that an active role by regulatory authorities directly contributes to observance of good corporate governance practices. Originality/value – The value of the paper is in its contribution of knowledge in an area that is least researched in Zimbabwe. The paper should be quite useful to academics in terms of understanding developing country corporate governance issues. The paper is also valuable to business executives especially those operating in economies under stress. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Corporate Governance Emerald Publishing
Loading next page...

You're reading a free preview. Subscribe to read the entire article.

And millions more from thousands of peer-reviewed journals, for just $40/month

Get 2 Weeks Free

To be the best researcher, you need access to the best research

  • With DeepDyve, you can stop worrying about how much articles cost, or if it's too much hassle to order — it's all at your fingertips. Your research is important and deserves the top content.
  • Read from thousands of the leading scholarly journals from Springer, Elsevier, Nature, IEEE, Wiley-Blackwell and more.
  • All the latest content is available, no embargo periods.