The effect of corporate governance on bank performance: evidence from Turkish and some MENA countries banks

Abstract

This paper examines the relationship between the structure of corporate governance and performance in the banking sector. A sample has been selected using the generalized method of moment (GMM) approach. The sample consists of data from a total of 33 Turkish, Tunisia, Morocco and Lebanon banks which are listed in stock during the period between 2012 and 2017. Since this paper emphasizes corporate governance, a “Board Characteristics Index” was developed based upon four different aspects of the board composition–board leadership structure, board member characteristics and board committee structure. It also demonstrates how the overall index relates to banking performance. The results show that the governance index, which aggregates with the four sets of board attributes relate significantly and positively with return on assets.