Corporate social responsibility, corporate governance and financial performance of banks in Ghana

Abstract

The main purpose of this study was to examine the effect of corporate social responsibility and corporate governance on financial performance of indigenous and non-indigenous banks in Ghana using a balance panel of twenty-one (21) indigenous and non-indigenous banks over ten time periods, from 2009 to 2018. The study used cross-section data set within a causal research design. The variables included in this study are: return on assets, return on equity, net interest margin, bank size, leverage, age, board size, Chief Executive Officer (CEO) Duality and board composition. The study revealed that, board size, board composition, bank size and age had positive effects on return on assets, return on equity and net interest margin. However, CEO duality and leverage had negative effects on return on assets, return on equity and net interest margin. Finally, the study found that interaction of CSR and board size and CSR and board composition had positive effects on return on assets, return on equity and net interest margin. However, interaction of CSR and CEO duality had negative effect on return on assets, return on equity and net interest margin. The study therefore recommends that management of indigenous and non-indigenous banks must consider corporate social responsibility, board size, age, board composition and CEO duality in their decisions concerning profitability since these variables affect profitability.