The Effect of Corporate Governance Indices on Financial Stability in Banks Listed at Tehran Stock Exchange

This study aims at investigating the role of Corporate Governance in the financial stability of banks listed at the Tehran Stock Exchange from 2012 to 2018.  Corporate governance is a good mechanism for controlling risks within firms. Corporate Governance relationships for shareholders in a specialized and independent position with systematic risk in the banking sector is very important. Specifically, corporate governance of shareholders for larger banks which are part of the security networks are at higher risk. They try to pass on the risk to taxpayers.  This is descriptive-analytical, applied research using post-quasi-experimental data collection method in the area of ​​positive financial research, and was performed using multivariable regression and econometric models. The results show that the effect of having two CEO’s on financial stability is negative and significant, the effect of institutional shareholders on financial stability is positive and significant, and the effect of government ownership variable on financial stability variable is negative and significant. Moreover, the effect of the ratio of independent board members and the number of board members on financial stability is positive and significant.