Ownership Structure, Board Structure And Performance In The Tunisian Banking Industry (original) (raw)
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We investigate how internal governance mechanisms affect performance in banks. Using a sample of 132 observations representing 11 Tunisian (universal) commercial banks listed on the Tunis Stock Exchange (BVMT) over the period 2005-2016, we employ a multiple regression analysis. We show that board size has a positive and statistically significant impact on the performance of Tunisian banks. Similarly, board independency is positively associated with bank performance. Whereas CEO duality has a positive effect on return on assets but it has a negative effect on return on equity. We also find that institutional ownership has a negative impact on banking performance while foreign ownership has a positive impact on the ROA and a negative effect on the ROE. We finally show that state ownership has a negative impact on the banking performance. Overall, our results underline the influences of both board and ownership structure in corporate governance within banks.
Governance Effect of Board of Directors on Banking Performance: Evidence From Tunisia
International Journal of Financial Research, 2020
The research tried to assess the impact of board characteristics on Tunisian bank's performance. The empirical study is based on a sample of 10 commercial banks during the period 2008-2017. Firstly, we proceed to estimate the impact of board characteristics on bank performance measured by Return on Assets (ROA) and Return on Equities (ROE) ratios. The estimation results achieved have positive and negative effects on the economic and financial bank's profitability. Hence, on the one hand, the estimate test gives a positive impact of ratio Market to book and the ratio Interest / Commissions in case of economic performance (VIC). On the other hand, these two ratios have a negative impact on performance measured by the ROE and ROA. Regarding the board and bank size, the estimate test gives a negative impact on economic profitability and a positive impact on financial profitability.
Corporate Governance and Bank Performance: Evidence from Jordanian Banking Industry
Based on a sample of 14 banks listed on Amman Stock Exchange market over the period 1997 to 2006, this paper investigates the influence corporate governance (namely: ownership structure, board composition, and board size), and bank performance using a linear regression analysis. The results show that ownership structure and board composition have a strong impact on the bank performance. Results indicate that banks with institutional majority ownership have the highest performance and that as manager's and board members' ownership percentages increase the bank becomes more efficient. Surprisingly, board size has no effect on bank's performance.
Analysis of the Impact of Governance on Bank Performance: Case of Commercial Tunisian Banks
Journal of the Knowledge Economy, 2016
Most studies that have investigated the relationship between governance and performance of banks were interested in the developed countries and to a lesser extent, the emerging countries. In this study, we tried to look from an empirical perspective, at the impact of governance through some internal mechanisms, on the performance of banks in a developing country like Tunisia. According to Kolsi and Ghorbel (2011), the effect of governance on the financial and stock market performance is still unknown. This result goes in the same direction as that of Adjaoud et al. (journal compilation 15, 2007), leading to the lack of connection between governance and traditional performance measures. The empirical analysis is performed on a sample of eight Tunisian commercial banks listed on the Stock Exchange over the period 2000-2011; we can conclude that there is no standard governance structure and that each bank should adopt the appropriate governance structure to improve the performance of the financial market, in general, and the banking market, in particular. The verification of this central assumption in the Tunisian context, therefore, is the fundamental contribution of this study. It is for this reason that the results we, even modest, have achieved allow enriching the issue of the impact of some governance variables varying according to the chosen performance measurement, which is a neglected theme in the Tunisian context.
CORPORATE GOVERNANCE AND BANKS' PERFORMANCE: EVIDENCE FROM EGYPT
This study investigates the effect of corporate governance on banks' performance in Egypt. It tests the relationship between bank performance and selected factors of corporate governance mechanisms, namely the board size, non-executive directors, CEO duality, board female, board qualifications, and the block holders. Return on assets and return on equity are used as proxy for bank performance. The control variables used in this study are bank size, capital adequacy ratio, debt ratio, the real GDP growth, crisis and revolution. The study used financial data of 25 Egyptian banks covering a period from 2006 to 2014. I used Generalised Least Square (GLS) Random-Effects models to investigate for this relation to find that board size, CEO duality, capital adequacy ratio and bank size are positively affect the bank performance. Revolution has a significant negative correlation with ROA, indicating that Egyptian banks suffered significantly during the revolution period especially the local banks. Non-executive directors, women presentation, board qualifications, and the block ownership have no effect on bank performance. Despite Egyptian banks still have poor corporate governance compared to banks of developing countries, especially in transparency and disclosure; the empirical findings suggest that governance has an essential role in deciding the Egyptian banks' performance. Contribution/ Originality: This study contributes to the existence literature of corporate governance as it is one of the very few studies which have examined the effect of governance mechanisms on the Egyptian banks 'performance. The findings of this study will benefit the policy makers and bank regulators in Egypt and other emerging countries.
The Influence of Board Ownership on Bank Performance: Evidence from Saudi Arabia
Journal of Asian Finance, Economics and Business, 2021
The current study aims to investigate the influence of different categories of ownership held by different types of board members on bank performance. The study uses a sample of Saudi listed banks for the period from 2011 to 2018. The results of the panel data analysis using firm fixed-effects regression model indicate that bank performance is significantly and positively affected by the chairman ownership and the CEO ownership. However, board independent members’ ownership has a negative influence on bank performance. While non-executive board members’ ownership and family board members have an insignificant impact on bank performance. Control variables, including board size, non-executive board members, government ownership, leverage, and bank size are significantly associated with bank performance. Overall, the results indicate that Saudi bank performance is higher in smaller banks that have smaller boards with lower non-executive members, lower portion of shares held by independ...
Board Characteristics, Ownership Structure and Bank Performance: Evidence from Iraq
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This paper presents the key role of corporate governance on the performance of banks in Iraq. This study aims to examine the relationship between board characteristics, ownership structure, and bank performance by considering panel data of18 banks for period 2005-2021 in Iraq. This relationship is estimated by using the panel OLS and regression technique. The findings reveal there is a significant positiverelationship between board composition, family ownership, board size and bank performance. Additionally, findings show that female board of directors is one of the reasons to make down the bank performance in Iraq. Taken together, this study finding recommended to regulators, in particular for the current financial reform of corporate boards.
Corporate Governance, Ownership Structure and Bank Performance in Jordan
This study set out with the aim of investigating the effect of ownership structure and corporate governance on bank performance (profitability and operating efficiency). The study relied much on publicly available data for a sample of the thirteen listed banks in Jordan for the years 2000 to 2012. The study has shown that ownership concentration has a positive and significant effect of bank performance (profitability) while foreign ownership positively affects the bank performance (operating efficiency). Another important finding is that as board size increases the bank performance (profitability) increase, suggesting that good corporate governance standards are imperative to every bank and important to investors and other stakeholders.
Whereas banks operate under different management, board of directors, ownership structures, and government regulations, there is no specific optimal corporate governance model that may be applied to all banks. This study investigates the effect of internal corporate governance mechanisms such as board structure, ownership structure, and audit function as well as other variables such as bank size and bank age on bank financial performance. The sample of the study comprises of both conventional and Islamic banks operating in the seven Arabian Peninsula countries, namely Yemen and the Gulf Cooperation Council (GCC) countries, Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates. Regression analysis (OLS) is used to test the aforementioned effect. The results of this study reveal that there is a significant relationship between corporate governance and bank profitability. Board meetings and bank age have positive and significant effects on ROE. Meanwhile, board independence and bank size have negative and significant effects on ROA. In addition, while bank age and board committees have positive effects on Profit Margin, ownership concentration has a negative effect on this profitability measure. These results are consistent with previous studies. However, the literature indicate that the correlation between corporate governance and bank performance is still not clearly established and that impact of corporate governance on bank financial performance in developing countries is still relatively limited.
Ownership Structure, Board Characteristics and Corporate Performance in Tunisia
International Journal of Business and Management, 2012
Drawing upon prior empirical research on the potential endogeneity of both ownership structure and firm performance in developed markets, this study examines the reverse causations that can exist between corporate performance and ownership structure in Tunisian listed companies. The study was extended to include board characteristics as a principal internal control mechanism for monitoring managers and an assessment of its potential effects on firm performance and ownership structure. Our findings proved the existence of endogeneity and a two-way causality between ownership variables and Market to book performance. However, our findings also revealed that corporate governance in Tunisian firms needed to be more strengthened based on board characteristics.