Abstract:
We examine how board characteristics and activities affect firm performance of banking
institutions listed on the Ghana Stock Exchange. The data come from the annual reports of
the banking institutions for the period, 2007-2012. The results of the study show that the
proportion of non-executive directors on boards of these institutions positively influence
their performances. This clearly highlights that the presence of non-executive directors on
boards of these banking institutions enhances monitoring and advisory role of boards thus
leading to firm performance. The results also reveal that the number of board meetings per
year by the boards of the banking institutions positively affects firm performance. This
implies that as the number of board meetings increases, the monitoring and advisory role of
boards improves, hence translating into firm performance. The study however, did not
provide any significant relationship between board size, the composition of audit
committee membership and chief executive status, and firm performance. Our findings
have implications for the design of suitable corporate governance structures for listed
banking institutions. More so, the results provide information that can inform policy
debates within the Securities and Exchange Commission of Ghana and Bank of Ghana.
