Board characteristics and financial institutions’ performance: Evidence from an emerging market

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Abstract

One of the main objectives of the present study is to investigate the relationship between the board variables (namely: board size, board meetings, board compositions, board diversity, and CEO duality), variables and Qatari financial institutions’ performance measured by ROA, ROE, and EPS. Another objective of this paper is to compare the performance of conventional financial institution are more profitable than Islamic ones. The study uses 56 listed financial institutions in the Qatari exchange market. The panel data regression was used to analyse the data in this paper. The results found that the board meeting is positively associated with all performance measures. Moreover, board size has a positive relationship with EPS while board compositions are positively associated with ROA. However, board diversity has a negative relationship with all performance measures. Finally, the results failed to report any statistically significant and negative relationship between CEO duality and financial institutions’ performance. In addition, the results indicate that Islamic institutions are of lower performance compared to non-Islamic institutions.

Keywords: Board Structure, Financial Performance, Emerging Markets, Financial Institutions, Banks

Authors’ individual contribution: Conceptualization — M.S.B. and O.B.T.; Methodology — M.S.B. and O.B.T.; Writing — M.S.B., O.B.T., A.A., and F.A.; Formal Analysis — A.A.; Funding Acquisition — M.S.B. and A.A.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

Acknowledgements: The authors extend their appreciation to the Deanship of Scientific Research at King Khalid University for funding this work through the general research project under grant No. G.R.P-382–42.

JEL Classification: C23, G20, G34, L25

Received: 27.01.2021
Accepted: 12.04.2021
Published online: 14.04.2021

How to cite this paper: Bajaher, M. S., Thabet, O. B., Alshehri, A., & Alshehri, F. (2021). Board characteristics and financial institutions’ performance: Evidence from an emerging market. Journal of Governance & Regulation, 10(2), 84–95. https://doi.org/10.22495/jgrv10i2art8