Governance and Performance of Tunisian banks

Mohamed Ali Trabelsi

MPRA Paper from University Library of Munich, Germany

Abstract: Developing banking standards is an important process for a country’s financial and economic well being. Their importance incites governments to insure the stability and the performance of their banking systems. Accordingly, several researchers pay a particular attention to banking governance. Specifically, shareholders-managers’ convergence of interests and the possible repercussions of these on banks’ performance can be avoided only by implementing a solid system of governance. The main purpose of this article is to determine the impact of governance on the performance of banks, through an empirical study of a sample of 10 Tunisian banks during the period 1997-2007. Our empirical investigation shows a positive association between external administrators and performance. It is worth signaling that a high number of administrators results in a negative effect on performance. The results also reveal that managers lack control in favor of the board of directors which seems to enjoy a lot of power. This state of affairs seems to relay from the fact of associating the role of the manager with that of the board of directors. Finally, our results reveal a negative association between the presence of a group of dominant shareholders and performance, a phenomenon which might be explained in terms of private appropriation of benefits.

Keywords: Banks; Corporate governance; Board of directors; Ownership structure; Performance; Shareholders; Managers. (search for similar items in EconPapers)
JEL-codes: G32 G34 (search for similar items in EconPapers)
Date: 2010, Revised 2010
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Published in International Journal of Economics and Finance 2.3(2010): pp. 189-198

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Related works:
Working Paper: Governance and performance of Tunisian banks (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:80440

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