مجلة التمويل والاستثمار والتنمية المستدامة
Volume 9, Numéro 1, Pages 123-143
2024-06-30

Governance Practices And Their Effect On Bank Performance: A Study Of Saudi Arabian Banking Sector



Authors : Charchafa Ilyes . Kimouche Bilal .

Abstract

This study investigates the impact of corporate governance mechanisms like board characteristics (size, independence, CEO duality) and audit committee attributes (independence, size, meeting frequency) on the profitability (ROA and ROE) of 12 listed Saudi banks from 2013-2019. Using multivariate regression on 61 bank-year observations, larger board in size is found to exhibit a strong positive correlation with ROA and ROE, suggesting better decision-making and oversight. However, board independence, CEO duality, and audit committee characteristics show no significant links to performance, contradicting theory. The results highlight the importance of optimal board composition, while indicating adherence to certain governance practices may not directly boost profitability in the Saudi banking context.

Keywords

Corporate governance ; Bank performance ; Saudi Arabia

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