Corporate governance and banks performance: empirical evidence from GCC countries

Abstract

This study aims to research the impact of corporate governance on banks performance of the Gulf Cooperation Council countries (GCC), through an econometric study, based on multiple regression analysis of Panel data, and the Generalized Method of Moments (GMM), for a sample of 24 commercial banks, during the period (2010-2021). We measured the corporate governance, through board characteristics indicators: board size (BS), executive members on the board (EXC), board independence (IND), number of board meeting (NBM), and we measured the banks performance, through two indicators : return on average assets (ROAA) and return on average equity (ROAE). The results concluded that there is a significant positive impact of BS, IND on ROAA- ROAE, and a significant negative impact of EXC, NBM on ROAA- ROAE, that what confirms all our hypotheses, in line with agency, and resource dependence theories. The results confirm that an effective board of directors promotes sound corporate governance and thus achieving good performance.