CORPORATE GOVERNANCE COMPLIANCE AND FINANCIAL PERFORMANCE IN ROMANIAN FINANCIAL INSTITUTIONS

Abstract

This paper examines the effect of compliance with the Corporate Governance Code (CGC) on the profitability and leverage of Romanian financial institutions listed in the Premium category. The study uses panel data from 2018–2023, applying descriptive and regression analyses processed in Microsoft Excel to evaluate the impact of governance compliance, foreign ownership, and managerial ownership on ROA, ROE, and LEV. The findings show that CGC compliance significantly improves profitability but does not affect leverage. Managerial ownership enhances both ROE and leverage, while foreign ownership increases leverage without improving performance. The results contribute to corporate governance research in emerging markets and offer practical insights for regulators and investors regarding the importance of effective governance mechanisms.