Effect Of Corporate Governance On Performance Of Listed Banks

Abstract

Following the recent corporate scandals and turbulences in the Ghanaian financial sector, a fierce debate on banks and corporate performance nexus has emerged. While literature on banks-corporate performance subject remain highly contested, evidence within the Ghanaian contest is sparse. This paucity of literature has motivated this study to examine the effect of corporate governance practices on commercial banks’ performances within the Ghanaian contest drawing evidence from the Ghana Stock Exchange market for the period 2009-2019. Correlational analysis and fixed effect and random effect regression estimator have been employed as the main estimation techniques. Results show that board diversity positively influence corporate performance indicators such ROA and EPS. The study further found that size of the board of directors has negative effects on bank’s performance. Another very important discovery from this study was that, composition of board of directors has effects on bank’s performance. Thus, independent board of directors have positive effects on bank’s performance. Ownership concentration has negative effects on bank’s performance in that larger ownership was usually associated with higher risks. As a sequel, policy should aim at enhancing corporate governance practices while females should be given a fair representation on board committees. The study again advises that independent directors should be included in the board to achieve greater firm results. The arrangement of company ownership should be assessed and controlled. Concentrated ownership structure in specific should be promoted and banks should strive to increase the size of the Independent Board to improve results