The effect of corporate governance on financial risk of Iranian holding companies

Holding companies are one of the main factors in economic development of each country. Corporate governance can affect these companies from different aspects. Financing plan as a related subject in implementing development plans is very important. Therefore, the aim of this research is to investigate the relationship between corporate governance and financial risk of holding companies listed in Tehran Stock Exchange during 2009-2013. For measuring corporate governance, we use ownership concentration, institutional ownership, size of board and board independency. For measuring financial risk we use debt ratio. The population of this research is 83 active holding companies listed in TSE. The results confirm a significant but negative relationship between institutional ownership and financial risk. Other variables didn’t have any significant relationship with financial risk.