The effect of corporate governance characteristics on the performance of Jordanian banks

Abstract

Corporate governance has become a common discussion issue in developed and developing countries. Therefore, the intensive interest that the corporate governance determines firm performance and protects the interests of shareholders has result in increasing global concern about the corporate governance concept and determinants. There is an increasing forms of corporate finance literature which build a correlation between corporate governance techniques and financial performance. This study represents a new attempt to show the role of corporate governance characteristics on the performance of Jordanian Banks expressed by return on equity ROE during the period from 2014 to 2017. The investigation employed statistics measurements and tools to state the relationships between ROE and different variables. The study indicates a significant effects of different corporate governance characteristics on the performance of banks. In other words, the study reports significant effects of the board size, board diligence, audit committee size and audit committee diligence separately on ROE by considering two controlling variables; namely, firm size and return on assets.

The Relationship of Macro-risk Indicators, Internal Factors, and Risk Profile of Islamic Banking in Indonesia

“…The backbone of corporate governance is agency theory correlated to external factors like macroeconomic risk such as foreign exchange, interest rate, inflation rate, and economic growth. It is one of the main theories to figure corporate governance (Pratiwi, 2016;Ikram et al, 2016;Warrad & Khaddam, 2020). The correlation between macro-risk and corporate governance is in line with the hypothesis, except the relationship between forex and GCG.…”

“…Second, macroeconomic stability positively affects banks' investment in corporate governance quality that calls the voluntary reform effect. These findings substantiated the following areas: (i) the effectiveness of OJK and Bank of Indonesia as regulatory authorities; (ii) Islamic banking disclosure, compliance, and transparency rules; and (iii) the quality of the controlling and enforcement (Ugur & Ararat, 2006;Warrad &Khaddam, 2020 andMukhibad et al, 2020).…”

“…Forex and BI rates positively correlated with GCG, but conversely, inflation rates and economic growth negatively impact GCG. Some previous studies proved that macroeconomics factors as external risk influence to corporate governance compliance in bank managerial (Warrad & Khaddam, 2020;Zhang et al, 2019;Mukhibad et al, 2020).…”

The financial impacts of board mechanisms on performance: The case of listed Moroccan banks

“…The natural logarithm of the bank's total assets at the end of each fiscal year. (Habis, 2017;Louizi, 2011;Sbai & Meghouar, 2017;Warrad & Khaddam, 2020)…”

Islamic index, independent commissioner and firm performance

“…The variables used in this study include the number of independent directors, the number of independent commissioners and the number of directors, commissioners and audit commissioners. This is in addition to the use of the BIG 4, leverage, firm size and firm age (Al Farooque et al, 2019;Harymawan et al, 2019;Rahman et al, 2019;Warrad & Khaddam, 2020).…”