The importance of responsibility, accountability, transparency and fairness are raising the issues of their effect on the performance of the firm and the managers as well. This is closely related to the agency problem because corporate governance mechanisms intend to induce managers to act according to the best interest of the shareholders, which is by maximizing the firm's value and ultimately reducing agency costs. This study is a contribution to other studies conducted to examine the impact of corporate governance mechanisms on firm's performance of the insurance industry in Bahrain, understand how to minimize the agency costs effectively and design the appropriate organizational structure. Also, to distinguish between good and bad corporate governance which is a crucial step in building the market's confidence and attracting positive investment flows to the institution and the economy. E-views program has been used to regress and the method the Pooled data. Five insurance companies listed in BSE have been selected as a sample for this study for the period of 2005-2010. Therefore, the total panel of observations is 30. The research concludes that there is no statistically significant impact of corporate governance expressed by CEO status, ownership concentration, the number of employees, industry performance, and number of shares traded on firm's performance in the insurance industry expressed by the dependent variable-return on equity (ROE). On the other hand board size, firm size, number of block-holders found to have statistically significant impact on firm's performance in the insurance industry expressed by the dependent variable-return on equity (ROE). This result, confirms the importance of good governance structure on the firm and the whole economy in the long run. The researcher suggests that every insurance firm should properly define corporate governance and its mechanisms and implement them effectively in order to reach the firm's long-term goals, build stakeholders' confidence and generate positive investment flows. The recent financial crisis has had enormous impacts on the economy, leading to major problems in insurance companies. Therefore, an insurance company should focus on good corporate governance that will build a stable foundation for recovering from this crisis. Regarding future line of research, efforts should be put at increasing the sample size, the corporate governance variables, and the time frame in order to have more accurate and reliable results. More importantly, the empirical literature indicates a sample selection bias in favor of very big firms. It is hereby suggested that attention should be devoted to the study of small-and

The impact of firm characteristics on the capital structure of the insurance industry in Bahrain is nowadays considered to be an important issue. Many insurance companies don't know what factors affect their capital structure, making ad-hoc, and sometimes inappropriate, decisions regarding their financial mix. We attempt to highlight the critical firm characteristics that managers should consider when setting their "optimal" capital structure. Our study is based on a multiple linear regression analysis using SPSS. Each independent variable along with the dependent variable is measured separately for a sample of insurance companies in Bahrain for the period of 2005-2009. Our research identifies a strong relationship between firm characteristics, such as (1) Tangibility of Assets, (2) Profitability, (3) Firm Size, (4) Revenue Growth, and (5) Liquidity, and observed capital structure, as represented by the Debt Ratio, although Profitability and Revenue Growth are not statistically significant and require further research.

The importance of responsibility, accountability, transparency and fairness are raising the issues of their effect on the performance of the firm and the managers as well. This is closely related to the agency problem because corporate governance mechanisms intend to induce managers to act according to the best interest of the shareholders, which is by maximizing the firm's value and ultimately reducing agency costs. This study is a contribution to other studies conducted to examine the impact of corporate governance mechanisms on firm's performance of the insurance industry in Bahrain, understand how to minimize the agency costs effectively and design the appropriate organizational structure. Also, to distinguish between good and bad corporate governance which is a crucial step in building the market's confidence and attracting positive investment flows to the institution and the economy. E-views program has been used to regress and the method the Pooled data. Five insurance companies listed in BSE have been selected as a sample for this study for the period of 2005-2010. Therefore, the total panel of observations is 30. The research concludes that there is no statistically significant impact of corporate governance expressed by CEO status, ownership concentration, the number of employees, industry performance, and number of shares traded on firm's performance in the insurance industry expressed by the dependent variable -return on equity (ROE). On the other hand board size, firm size, number of block-holders found to have statistically significant impact on firm's performance in the insurance industry expressed by the dependent variable -return on equity (ROE). This result, confirms the importance of good governance structure on the firm and the whole economy in the long run. The researcher suggests that every insurance firm should properly define corporate governance and its mechanisms and implement them effectively in order to reach the firm's long-term goals, build stakeholders' confidence and generate positive investment flows. The recent financial crisis has had enormous impacts on the economy, leading to major problems in insurance companies. Therefore, an insurance company should focus on good corporate governance that will build a stable foundation for recovering from this crisis. Regarding future line of research, efforts should be put at increasing the sample size, the corporate governance variables, and the time frame in order to have more accurate and reliable results. More importantly, the empirical literature indicates a sample selection bias in favor of very big firms. It is hereby suggested that attention should be devoted to the study of small-and

The aim of this study is to analyze the financial performance of major banks in Bahrain. This study covers the calculation of important financial ratios of major financial institutions in Bahrain as well as comparing their performance in the context of the global financial crisis. It also compares ratios of conventional banks with Islamic financial institutions in Bahrain. These ratios define profitability, financial performance, size and type of banks.The analysis of ratios shows the differences in financial management practices of banks in the respective areas. The study reveals that there are wide differences in the ratios used by different banks, especially before and after the financial crisis.This study helps identify best practice in the areas of profitability management, liquidity management, and interest rate risk management.The result of the analysis of ratios for measuring financial performance shows that there is corporate excellence in asset management and value equity shares. This analysis can be used as a basis for preventative actions for future bankruptcy and market risk. The components in financial statements for Islamic banks differ from conventional banks.The study recommends that banking institutions in Bahrain should use this ratio analysis to prevent unpredicted financial problems and take corrective measures or provisions to avoid such events for financial institutions.