Corporate governance and non-bank financial institutions profitability
International Journal of Law and Management
ISSN: 1754-243X
Article publication date: 13 November 2017
Abstract
Purpose
This study aims to investigate the influence of corporate governance structures of non-bank financial institutions (NBFI) on their profitability.
Design/methodology/approach
The analysis is performed using data derived from the Bank of Ghana database during a nine-year period, 2006-2014. Correlated panels corrected standard errors model is used to estimate the regression equation. The study uses board size, board independence, gender diversity, CEO duality and tenure and board meetings as proxies for corporate governance. Audit committee size, independence and meetings are used as measures of audit committee activity. The study also uses the return on assets as measures of NBFI profitability.
Findings
Results of the study show that there exists positive relationship among board size, audit committee size, meetings of the audit committee and profitability. However, board composition, gender diversity, board meetings and audit committee independence show a negative relationship with NBFI performance. From the findings of the study, it is evident that there are mixed results regarding corporate governance mechanisms and profitability of Ghanaian NBFIs. The results imply that the Ghanaian NBFI industry have unique characteristics and may react differently to corporate governance structures.
Originality/value
The value of this study is in its contribution to the extant literature on corporate governance and profitability of NBFIs.
Keywords
Citation
Ofoeda, I. (2017), "Corporate governance and non-bank financial institutions profitability", International Journal of Law and Management, Vol. 59 No. 6, pp. 854-875. https://doi.org/10.1108/IJLMA-05-2016-0052
Publisher
:Emerald Publishing Limited
Copyright © 2017, Emerald Publishing Limited