Corporate Governance and Ethics in the PNG Banking Industry: Challenges and Opportunities

Abstract

Banking systems play a central role in the economic development of any nation. Poor corporate governance (CG) within banks has long been identified as one of the major reasons for financial crises. This study examines the corporate governance and ethical practices in the commercial banking sector of Papua New Guinea (PNG), with particular focus on customer perceptions in Port Moresby. Using a mixed-methods approach, primary data were collected from 89 customers through structured surveys and open-ended interviews. The analysis shows that while about 87 per cent of respondents consider CG important or very important, nearly 77 per cent have either nil or limited knowledge of CG concepts in banking. Around 84 per cent of respondents rate ethical standards at their banks as fair or good, and a similar proportion express satisfaction with banking services. The study identifies lack of comprehensive training, regulatory constraints, and insufficient enforcement as the top challenges. It recommends customer awareness programmes, stronger regulatory action by the Bank of Papua New Guinea (BPNG), and further bank-level research. The findings are analysed using Stakeholder Theory as the theoretical lens.