ORIGINAL RESEARCH article
Front. Sustain.
Sec. Sustainable Organizations
Volume 6 - 2025 | doi: 10.3389/frsus.2025.1588468
Impact of Corporate Governance and Social Responsibility on Credit Risk
Provisionally accepted
- Prince Mohammad bin Fahd University, Khobar, Saudi Arabia
Select one of your emails
You have multiple emails registered with Frontiers:
Notify me on publication
Please enter your email address:
If you already have an account, please login
You don't have a Frontiers account ? You can register here
This study measures the effects of corporate governance (CG) and corporate social responsibility (CSR) on bank risk. The data were collected from DataStream from 2010 to 2021 from the World Development Indicators. The analysis in this study utilized the fixed effects model, where multiple parameters were found to be negatively associated with credit risk, such as board independence, board size, and board meetings. By contrast, ownership concentration can positively affect bank credit risk. Additionally, applying CSR can decrease credit risk. Finally, this study sheds light on the implementation of governance, which leads to a reduction in credit risk. Our findings have significant policy implications for credit risk management in the banking sector, emphasizing that a one-size-fits-all approach is inadequate. Governance practices effective in one context may not produce the same outcomes in another. The evidence suggests that banks in emerging economies are making meaningful strides in establishing and strengthening effective governance frameworks.Ethical Compliance: All procedures performed in this study involving human participants were in accordance with the ethical standards of the institutional and/or national research committee and with the 1964 Helsinki Declaration and its later amendments or comparable ethical standards.
Keywords: Corporate Governance, Corporate social responsibility, board size, Credit risk, Agency theory
Received: 11 Mar 2025; Accepted: 20 May 2025.
Copyright: © 2025 ALHARES. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
* Correspondence: AWS ALHARES, Prince Mohammad bin Fahd University, Khobar, 31952, Saudi Arabia
Disclaimer: All claims expressed in this article are solely those of the authors and do not necessarily represent those of their affiliated organizations, or those of the publisher, the editors and the reviewers. Any product that may be evaluated in this article or claim that may be made by its manufacturer is not guaranteed or endorsed by the publisher.