Managerial Dominance over the Board and Audit Committee Independence in Financial Institutions

Charbel Salloum (), George Jabbour, Jacques Digout and Elias Gebrayel
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Charbel Salloum: CEREFIGE - Centre Européen de Recherche en Economie Financière et Gestion des Entreprises - UL - Université de Lorraine, GW - The George Washington University
George Jabbour: CEREFIGE - Centre Européen de Recherche en Economie Financière et Gestion des Entreprises - UL - Université de Lorraine, GW - The George Washington University
Jacques Digout: CEREFIGE - Centre Européen de Recherche en Economie Financière et Gestion des Entreprises - UL - Université de Lorraine, Groupe École Supérieure de Commerce de Toulouse - ESCT
Elias Gebrayel: CEREFIGE - Centre Européen de Recherche en Economie Financière et Gestion des Entreprises - UL - Université de Lorraine, USEK School of Business - Holy Spirit University of Kaslik, Jounieh, Lebanon

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Abstract: The purpose of this paper is to analyze whether the degree of control exercised by management affects the independence of the audit committee over the board of directors. Four characteristics of the bo ard are being examined; size, composition, CEO duality and manage ment ownership. Results from a samp le of 54 Lebanese banks operating in various Lebanese territories during the period 2009-2011 show that all of these banks created an audit committee between 2009-2011 and comply with Lebanese central ba nk regulations (BDL) to guara ntee their independence from management which requires the audit committee in Lebanese ba nks to be including independent members. Empirical results suggest that in Lebanese banks, managers can impair the effectiveness of audit committees by the presence of inside directors on the board and CEO duality.

Keywords: audit committee; independence; board of direct ors; management ownership; corporate governance. (search for similar items in EconPapers)
Date: 2015
Note: View the original document on HAL open archive server: https://hal.science/hal-01371710
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Citations: View citations in EconPapers (1)

Published in Investment Management and Financial Innovations, 2015, 12 (4), pp.34 - 43

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01371710

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