Board Size, Non-Executive Board Members and Financial Performance in Non-Usury Banks in Iran
DOI:
https://doi.org/10.18533/ijbsr.v6i6.921Keywords:
Board size, financial performance, non-executive board members, non-usury banking.Abstract
Prior studies investigating the relation between the financial performance and corporate governance mechanisms for firms in Tehran Stock Exchange mainly exclude banks due to their different types of rules and structure. We study the relation between corporate governance structure and financial performance of the banks under the non-usury banking act. We study various corporate governance factors including board size and the number of non-executive board members using a sample of 21 banks for 2010 to 2012. Result show a significant positive correlation among board size and financial performance. However, non-executive board members do not correlate with financial performance.
References
Abu-Tapanjeh, A. M. (2009). Corporate governance from the Islamic perspective: A comparative analysis with OECD principles. Critical Perspectives on Accounting 20, 556-567.
Al-Baidhani, A. M. (2013, May 22). The Effects of Corporate Governance on Bank Performance. Retrieved from http://ssrn.com: 2284814
Aljifri, K., & Khandelwal, S. (2013). Financial contracts conventional and Islamic financial institutions: an agency theory perspective. REVIEW OF BUSINESS AND FINANCE STUDIES, Vol.4 No.2, 79-88.
Alnasser, S. A., & Muhammed, J. (2012). Introduction to corporate governance from Islamic perspective. Humanomics, Vol. 28 No. 3, 220-231.
AL-Saidi, M., & AL-Shammari, B. (2013). Board composition and bank performance in Kuwait: an empirical study. Managerial Auditing Journal, Vol. 28 No.6, 472-494.
Bashir, A.-H. M. (2000). Determinants of Profitability and Rate of Return Margins in Islamic Banks: Some Evidence from the Middle East. prepared for the ERP`s Seventh Annual Conference to be , (pp. 1-28). Jordan.
Bashir, A.-H. M. (2003). Determinants of Profitability in Islamic Banks: Some Evidence from the Middle East. Islamic Economic Studies Vol. 11, No. 1, 31-57.
Belkhir, M. (2009). Board of directors’ size and performance in the banking industry. International Journal of Managerial Finance Vol. 5 No. 2, pp. 201-221.
Choong, Y. V., Thim, C., & Kyzy, B. T. (2012). Performance of Islamic Commercial Banks in Malaysia: An Empirical Study. Journal of Islamic Economics, Banking and Finance, Vol. 8 68 No. 2, 67-80.
Darmadi, S. (2013). Corporate governance disclosure in the annual report An exploratory study on Indonesian Islamic banks. Humanomics Vol. 29 No. 1, 4-23.
Department of Studies and Regulations of the Central Bank of Iran (2013). Constitution of Non-Governmental Commercial Banks.
Donaldson, L., & Davis, J. (1991). Stewardship Theory or Agency Theory: CEO Governance and Shareholder Rturns. Australian Journal of Management, Vol.16 No.1, 49-65.
HasasYeganeh, Y. (2005). Theoretical Foundation of corporate governance. Journal of Accountant, 20(1): 10-13.
Hassas Yeganeh, Y., Raeesi, Z., and Hoseini, M. (2009). Relationship between Quality of Corporate Governance and Corporate Performance in Tehran Stock Exchange. Journal of Iranian Management Sciences, 13(4): 75-100.
Khanchel, I. (2007). Corporate governance: measurement and determinant analysis. Managerial Auditing Journal Vol. 22 No. 8, 740-760.
Magalha˜es, R., & Al-Saad, S. (2013). Corporate governance in Islamic financial institutions: the issues surrounding unrestricted investment account holders. CORPORATE GOVERNANCE, 39-57.
Majid, N. A., Sulaiman, M., & Ariffin, N. (2011). Developing a Corporate Governance Disclosure Index for Islamic Financial Institutions. 8th International Conference on Islamic Economics and Finance (pp. 1-25). Doha: Center for Islamic Economics and Finance, Qatar Faculty of Islamic Studies, Qatar Foundation.
Mashayekhi, B., & Bazaz, M. (2008). Corporate Governance and Firm Performance in Iran. Journal of Contemporary Accounting & Economics Vol4, No 2, 156-1 72.
Morekwa, E., & Temesgen, K. (2013). The effect of governance on performance of commercial banks in Kenya: a panel study. CORPORATE GOVERNANCE, Vol.13 No.3, 236-248.
Motameni, A., JavadZadeh, M., and TizFahm, M. (2010). Evaluation of banks’ governance performance. Journal of Strategic Management Studies, 1: 141-159.
Mullineux, A. (2006). The corporate governance of banks. Journal of Financial Regulation and Compliance Vol. 14 No. 4, pp. 375-382.
Olson, D., & Zoubi, T. (2008). Using accounting ratios to distinguish between Islamic and conventional banks in the GCC region. The International Journal of Accounting 43, 45-65.
Quttainah, M. A., Song, L., & Wu, Q. (2013). Do Islamic Banks Employ Less Earnings Management? Journal of International Financial Management & Accounting 24:3, 203-233.
Rehman, R. u., & Mangla, I. (2012). Does Corporate Governance Influence Banking Performance? Journal of Leadership, Accountability and Ethics vol. 9 No.3, 86-92.
Rosly, S. A., & Abu Bakar, M. A. (2003). Performance of Islamic and mainstream banks in Malaysia. International Journal of Social Economics Vol. 30 No. 12, 1249-1265.
Tan, Y., & Floros, C. (2012). Bank profitability and inflation the: case of China. Journal of Economic Studies, Vol.39 No.6, 39, 675-696.
Tehran Stock Exchange (2013). Statue of Corporate Governance.
Utama, C. A., & Musa, H. (2011). The Causality between Corporate Governance Practice and Bank Performance: Empirical Evidence from Indonesia. Gadjah Mada International Journal of Business Vol. 13, No. 3, 227 - 247.
Wasiuzzaman, S., & Gunasegavan, U. (2013). Comparative study of the performance of Islamic and conventional banks The case of Malaysia. Humanomics Vol. 29 No. 1, 43-60.
Downloads
Published
Issue
Section
License
Authors who publish with this journal agree to the following terms:
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).
