The Influence of Corporate Governance Structure on Bank Performance in Turkey

• Main Author: Omer, Araz Mohammed Rashid
• Format: Thesis
• Language: English; English
• Published: 2011
• Subjects: HG Finance
• Online Access: http://etd.uum.edu.my/3229/1/ARAZ_MOHAMMED_RASHID_OMER.pdf; http://etd.uum.edu.my/3229/2/1.ARAZ_MOHAMMED_RASHID_OMER.pdf; http://etd.uum.edu.my/3229/

This study investigates the influence of the corporate governance structure on bank performance in Turkey. The framework of this study has been developed by agency theory .Finding of this study support this theory and decision making. Banking sector has seen strong competition and changes in customer’s expectations over the last few years especially after the world economic slowdown.The importance and increasing attention of the corporate governance in financial institutions tends to be accredited to the socio-political changes that have been arisen. Therefore, evaluating banks’ performance and monitoring their financial positions are important to many parties, such as stockholders, potential investors, creditors, customers, employees, and regulators. The current study focuses on the relationship between stockholders and management, As well as, the research will investigate the banks which are listed in Istanbul stock exchange. Based on a sample of 33 banks listed on Istanbul stock exchange in Turkey over the period 2004 to 2010, this research investigates the influences of corporate governance structure on bank performance in Turkey. Four variables of corporate governance structures which are board size, CEO duality, CEO tenure, and audit committee size, were used in this study. Two measures of bank performance are considered which are returns on assets (ROA) and operating cash flow (OCF). In Turkish banks, the result showed that the corporate governance board size has a positive and significant influence on return on asset. Meanwhile, corporate governance CEO duality, CEO tuner, and size of audit committee had a negative influence with return on asset. In addition, corporate governance board size and CEO tuner had a negative influence on the operating cash flow. Meanwhile, corporate governance (CEO duality and audit committee size) had a positive influence on the operating cash flow. The results of the study are expected to contribute to literatures on bank performance to which knowledge was added, and to the practices of the banks management to make better decision to enhance the bank performance by incorporating the effects of corporate performance structure.