Impact of Personality of Company Directors as a Behavioral Risk Contributor on Corporate Governance Process


  • Muhammad Ahmed.,PhD
  • Saima Naseer



Corporate Governance, Behavior, Process, Risk Contributor


The purpose behind leading this review is to highlight the behavioral issues with respect to organization directors as a noteworthy contributory variable to the failures subsequent to examining some current and significant failures. The occasions which prompted the corporate failures in organizations, for example, Lehman Brothers, BCCI, Enron, WorldCom, RBS and Maxwell Group represent the improper moves and choices made by the directors and how these decisions added to their failures. The review looks at behavioral risks in corporate governance, and tries to discover behavior constitution. This study suggests that “personality” and “situations” are components which add to behavior. In corporate governance, thought of risk management components shows that the behavioral risks have persisted unidentified to a great extent. Considering the antagonistic financial and social effect of corporate failures in connection to public organizations, which incorporates capital and occupation misfortunes, loss of trust in private enterprise, lessened markets for products and ventures; and the support for the State to intercede keeping in mind the end goal to protect society from the event and results of these failures, this review proposes a hybrid regulatory model to determine impact of personality risks as a major aspect of the corporate governance process.

The basic necessities of a viable risk management process are examined and connected with during the time spent building up a reasonable structure for personality risk management from which the approach and arrangements in the proposed model are drawn. The hybrid model comprises of hard law provisions in the areas where they are deemed most essential in order to create effectiveness and soft law provisions in the areas in which it is thought that flexibility is necessary and would not negate the overall aims of the model


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Author Biographies

Muhammad Ahmed.,PhD

Faculty of Management Sciences, University of Central Punjab, Lahore, Pakistan

Saima Naseer

Faculty of Management Sciences, University of Central Punjab, Lahore, Pakistan