Banking Governance and Its Impact on Improving the Quality of Financing Decisions in Banks An Applied Study on Libyan Commercial Banks

Abstract

This study aims to analyze the impact of governance practices on improving financing decisions and ensuring the stability of the financial system. Banking governance is considered a key factor in reducing financial risks and enhancing the effectiveness of banking operations, especially in light of the financial crises witnessed worldwide in recent decades. The role of governance is highlighted in promoting transparency, accountability, and fairness, which contributes to better financing decision-making and mitigating the associated risks.

A descriptive-analytical approach was used to understand the relationship between banking governance and the quality of financing decisions. A combination of data collection tools, such as surveys and personal interviews, was employed, and data were collected from a sample of 34 employees at the Jumhuriya Bank.

The results show that the bank implements effective governance practices with a high level of transparency in loan and financing reports, which helps increase trust between the bank and its clients. The results also emphasize the importance of banks adhering to accountability principles, as governance is viewed as a pivotal element in ensuring sound and well-thought-out financing decisions.

The study also reveals the need to improve fairness standards in loan issuance and ensure that these standards are clear to all concerned parties. The findings indicate that the presence of internal audit mechanisms is one of the influencing factors in improving the application of governance principles, as this helps ensure proper oversight of financial operations.