Mediating Effect of Human Capital on the Correlates of Corporate Governance

Document Type

Article

Publication Date

7-4-2024

Keywords

Human capital, corporate governance, credit administration, asset quality, financial institutions

Abstract

It is essential to understand the variables that affect asset quality because of their implications on the risk to financial institutions and for financial supervision and financial stability. There exist empirical studies establishing significant relationships between corporate governance and asset quality, and credit administration and asset quality. What was missing that this study investigated based on Ghanaian financial institutions was the mediating role of human capital. Based on a correlational research design and randomly selecting financial institutions and their employees as respondents. The study resulted that human capital fully and significantly mediates the relationships between corporate governance and asset quality, and credit administration and asset quality. Therefore, human capital elements of the knowledge, skills, and experience of the board members and employees are fully critical in the attainment of good asset quality. The study recommends that financial institutions must fully include the level of the human capital of their employees and board members when evaluating the factors that must exist to ensure that they have good asset quality.

Journal Title

Review of Pacific Basin Financial Markets and Policies

Volume

27

Issue

2

DOI

10.1142/S0219091524500097

First Department

School of Business Administration

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