Damian Honey - School of Business and Economics, University of Management and Technology, Lahore, Pakistan; Department of Management and Business Administration, “G. D’Annunzio” University of Chieti-Pescara, Pescara, Italy.
Safia Nosheen - School of Business and Economics, University of Management and Technology, Lahore, Pakistan.
Saqib Farid - School of Business and Economics, University of Management and Technology, Lahore, Pakistan.

Though studies related to corporate governance shaping risk management are ubiquitous, fathoming income smoothing behavior and credit quality are fundamental to commercial banks, especially pertaining to economies in transition. In this context, we used panel data of eighteen commercial banks of Pakistan including both conventional and Islamic, for the period ۲۰۰۷ to ۲۰۱۷. The concept is supplemented by ownership and board structure as apt indicators of corporate governance and deeming income smoothing and credit quality as moderators is the peculiarity of our study. Surprising to note, our risk management model outperformed regulatory capital and profitability, on the road to monitoring effectiveness. Albeit income smoothing constantly remains a matter of concern, credit quality is imperative for risk management in our case. Hence, based on the findings, practitioners are suggested to consider board meetings and block holder ownership with aplomb for monitoring effectiveness of commercial banks in Pakistan. Nonetheless, institutional ownership demands further attention.

Board structure, Income Smoothing, Monitoring Effectiveness, Ownership Structure, risk management