CORPORATE GOVERNANCE AND FINANCIAL PERFORMANCE: AN EMPIRICAL STUDY ON EGYPTIAN BANKS

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Abstract

There is a distinct lack of research into the relationship between corporate governance and banks’ financial performance in the banking sector in Egypt. This research paper tries to fills this gab by examining the impact of corporate governance, with particular reference to the role of board of directors and ownership concentration, on the financial performance of Egyptian banks. Using a sample of 39 banks represent all commercial banks operate in Egypt for the period 2004– 2015 and controlling banks size and age. The study relied on the data through the annual reports of the respective banks, website of the central bank of Egypt and Data scope. The banks were selected for the study cutting across the local Islamic and Conventional banks, foreign Islamic and conventional banks, and regional Islamic and conventional banks. The results showed that banks ownership either foreign or national has an obvious effect on the banks’ financial performance. Board size has no significant effect. However, the hierarchy of the board of directors and the duality of the CEO has a direct effect on the banks financial performance in Egypt.

Keywords: Corporate Governance; Bank Financial Performance, Egypt

How to cite this paper: Hafez, H.M. (2015). Corporate governance and financial performance: An empirical study on Egyptian banks. Corporate Ownership & Control, 13(1-11), 1359-1374. https://doi.org/10.22495/cocv13i1c11p8