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Corporate Governance, Performance and Liquidity Risk of West African Economic and Monetary Union (WAEMU) Banks

Author

Listed:
  • Alassane Ouattara

    (IRG - Institut de Recherche en Gestion - UPEM - Université Paris-Est Marne-la-Vallée - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12)

  • Luc Paugam

    (ESSEC Business School)

  • Olivier Ramond

    (DRM - Dauphine Recherches en Management - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique)

Abstract

This chapter examines the relation between corporate governance mechanisms and operating performance and liquidity risk within the specific environment of West African Economic and Monetary Union (WAEMU) banks. The implementation of well-known western corporate governance mechanisms in emerging markets, which mostly focus on unsophisticated financial services, is likely to act more as operating constraints than value-creation factors. Based on a sample drawn from 98 commercial banks over the period 2006–2010, we document the following three main findings: (1) dual structure and board size are significantly negatively associated with banks' performance as proxied by Return on Assets (ROA) and Return on Equity (ROE), (2) dual structure and board diversity exhibit a significant negative relation with banks' liquidity risk, (3) the presence of chief executive officer (CEO) in the board of directors appears to be the only corporate governance mechanism efficiently associated with banks' liquidity risk.

Suggested Citation

  • Alassane Ouattara & Luc Paugam & Olivier Ramond, 2014. "Corporate Governance, Performance and Liquidity Risk of West African Economic and Monetary Union (WAEMU) Banks," Post-Print hal-01385140, HAL.
    • Handle: RePEc:hal:journl:hal-01385140
    DOI: 10.1142/9789814520386_0011
    as

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    Keywords

    Corporate Governance; Financial Institutions; Operating Performance; Liquidity Risk; WAEMU;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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