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Governance and Performance of Tunisian banks

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  • Trabelsi, Mohamed Ali

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.

Suggested Citation

  • Trabelsi, Mohamed Ali, 2010. "Governance and Performance of Tunisian banks," MPRA Paper 80440, University Library of Munich, Germany, revised 2010.
  • Handle: RePEc:pra:mprapa:80440
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    Cited by:

    1. Ahmed Zemzem & Oumeima Kacem, 2014. "Risk Management, Board Characteristics and Performance in the Tunisian Lending Institutions," International Journal of Finance & Banking Studies, Society for the Study of Business & Finance, vol. 3(1), pages 186-200, January.
    2. Sulaiman Abdullah Saif Alnasser & Joriah Muhammed, 2012. "Introduction to corporate governance from Islamic perspective," Humanomics: The International Journal of Systems and Ethics, Emerald Group Publishing, vol. 28(3), pages 220-231, August.
    3. Kozo Harimaya & Kei Tomimura & Nobuyoshi Yamori, 2015. "Disciplinary Pressure is More Necessary for Cooperative Banks Than Stock Banks: Results from Bank Efficiencies Estimation," Discussion Paper Series DP2015-05, Research Institute for Economics & Business Administration, Kobe University, revised May 2016.
    4. Rachdi Houssem & Trabelsi Mohamed Ali & Trad Naama, 2013. "Banking Governance and Risk: The Case of Tunisian Conventional Banks," Review of Economic Perspectives, Sciendo, vol. 13(4), pages 195-206, December.
    5. repec:wly:ijfiec:v:22:y:2017:i:4:p:368-378 is not listed on IDEAS

    More about this item

    Keywords

    Banks; Corporate governance; Board of directors; Ownership structure; Performance; Shareholders; Managers.;

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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