Does the Board Influence the Bank’s Performance? An Islamic & Commercial Banking Experience

Abstract

Purpose: This study investigates to explore the impact of corporate governance and the performance of the banking Industry of Bahrain for the period of 2012–2020. Theoretical framework: This research is to take a look at corporate governance actions and how it affects the actual bank performance, there are four chosen banks for this particular purpose that are listed under the Stock exchange of Bahrain (SEB) and the Central bank of Bahrain (CBB). Design/methodology/approach: The methodology for the study is based on pooled data collection from Islamic and commercial banks of Bahrain. All the data will be extracted from the chosen banks’ audited annual financial statements for 9 years ranging from 2012 to 2020. To go ahead with this research two kinds of dependent variables also called performance measures are (ROA, and ROE), and six kinds of independent variables were selected (CEO duality, the board size, board independence, female directorship, number of BOD meetings, and lastly board members expertise) for us to understand the bank performance better. Findings: The results showed good connections between the (BS) and bank performance as well as the (NBDM), while the (BDI) and (FD) displayed a negative link, and (BDME) and (CEOD) showed no signs of a relationship because all banks had separate people holding those positions instead of one. And even though (BDME) is proven and is logically impactful some analyses failed to show the true linkage. Research, Practical & Social implications: These results of the study will help the banking industry, regulators, investors, and government to understand the board’s influence on the firm performance. Originality/value: Original Research Article.