Enhancing corporate governance practices in the financial services sector

Corporate governance is of the utmost importance in the financial service industry this is not any less true. Weak corporate governance framework has contributed to the collapse of financial institutions, most notably in the cases of Bank of Credit and Commerce International (BCCI), Barings, mortgage endowment mis-selling by Equitable Life, opacity of split capital investment trust, and also a number of money laundering cases (Schachler et al., 2007). According to Caprio and Levine (2002), there are a number of concerns in the corporate governance of the financial industry that can be problematic; such as the opacity of banks and heavy regulations on corporate governance system, that impedes its mechanisms which can shift the system unfavorably (Caprio & Levine, 2002).