Home⇛Asia Pacific Journal of Management and Sustainable Development⇛vol. 12 no. 2 Part 3 (2024)

Corporate Governance, Internal Control, Risk Management of Cooperative Banks in the Philippines: Inputs to Bank Strategic Improvement Plan

Mickel M. Borigas

Discipline: management studies

 

Abstract:

This study evaluated the compliance of Philippine cooperative banks with the governance, internal control, and risk management standards established by the Bangko Sentral ng Pilipinas (BSP). A comprehensive assessment was conducted to examine corporate governance practices in terms of governance structure, board-level committees, and related party transactions; internal control mechanisms focusing on compliance frameworks, internal control frameworks, and internal audit functions; and risk management strategies and practices related to risk identification, risk assessment, and risk management evaluation. Furthermore, the study examined the relationship between corporate governance, internal control, and risk management, proposing a strategic improvement plan based on the findings. The findings revealed that cooperative banks generally adhere to BSP’s governance standards, demonstrating strong practices in governance structures, board-level committees, and related party transactions. Additionally, the banks maintain robust internal control frameworks and rigorous internal audit procedures. While risk management practices are generally effective, areas such as IT and social media risk management require further attention. A significant correlation was observed among corporate governance, internal control, and risk management practices, suggesting that improvements in one area can positively impact the others. Based on these findings, a strategic improvement plan is proposed to enhance the overall effectiveness of cooperative banks. The study recommends continuous improvement of governance structures, investment in advanced monitoring systems for internal controls, and prioritization of risk management improvements, particularly in IT and social media. Future research is suggested to explore the long-term impact of these recommendations on the sustainability and growth of cooperative banks in the evolving regulatory and technological landscape.



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