The Effect of Corporate Governance on Financial Performance of Commercial Banks in Ghana
Alexander Owiredu, Mercy Kwakye
Abstract
The study examined the influence of corporate governance principles on banks financial performance in Ghana. Data for the
study was gathered from the annual reports and the financial statements of the sampled banks from the period 2007-2016.
Random effect model was used to analyse the data. This study found a significant positive relationship between board size and
financial performance measured by ROA and ROE of banks in Ghana. Additionally, the study found a statistically positive
relation between foreign ownership and financial performance measured by ROE and ROE. Interestingly, the study outcome
further indicated positive but no statistically relationship between board independence and institutional ownerships and ROA
and ROE of the sampled banks in Ghana. Generally, the study supports the view that an improved corporate governance practices
is key to increasing firm financial performance.
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