THE INTERACTION BETWEEN CORPORATE GOVERNANCE AND FINANCIAL PERFORMANCE: AN IMPLEMENTATION FOR THE UK BANKS

Authors : Ibrahim ALMUSATTAR, Dilek TEKER

Pages : 64-69

Doi:10.17261/Pressacademia.2020.1350

View : 20 | Download : 8

Publication Date : 2020-12-31

Article Type : Research Paper

Abstract :Purpose- The purpose of this study is to examine the relationship between the performance of commercial banks with corporate governance elements. Thus, the listed commercial banks in the London Stock Exchange insert ignore into journalissuearticles values(LSE); of the UK will be considered in this study. Hence, using availability data of the Financial Times Stock Exchange 100 insert ignore into journalissuearticles values(FTSE 100); companies including banks that operate in LSE, the period insert ignore into journalissuearticles values(2010-2019);. Methodology- The study employs a sample of 10 biggest banks trading on insert ignore into journalissuearticles values(LSE); ranked by market capitalization as of December 31st. 2019. The study will use panel data method and the results will be analysed by descriptive statistics, correlation, and regression. Seven major corporate governance variables will be analysed within the framework of corporate governance theory namely: Board Size, Board Independent, Foreign owners, bank ownership structure, Audit Committee, Female Board, Financial Leverage, and board size and their impact on the financial performance of the commercial bank in the UK which will be measured using Return on Assets Ratio insert ignore into journalissuearticles values(ROA);, Return on Equity insert ignore into journalissuearticles values(ROE);, and The TOBIN’s Q. Finding- The analysis of previous studies reveals that internal corporate governance mechanism insert ignore into journalissuearticles values(Board of Director`s); has significant impact on the performance of banks such as Tamer Shahwan insert ignore into journalissuearticles values(2014);. Conclusion- This study will investigate the relationship between CG insert ignore into journalissuearticles values(Board Characteristics, Audit committee, Owners structure, and banks size and financial leverage); and banks performance which will measured by insert ignore into journalissuearticles values(ROA, ROE, and TOBIN; Q);.
Keywords : Corporate governance, board of directors characteristics, audit committee characteristics, ownership structure, bank performance