Corporate Governance and Performance of Commercial Banks in Ghana

Abstract

ABSTRACT The study examined the effect of corporate governance structures such as board size, board composition, dual chairmanship, and audit committee on the financial performance of commercial banks in Ghana. Compliance with corporate governance codes and guidelines, as well as trends in practice, were also examined. For four years, from 2016 to 2019, the study collected secondary data from annual reports and financial statements of a sample of nine commercial banks. The data were entered into excel and exported to STATA, where they were analyzed using random effect models and descriptive statistics such as mean, percentages, and frequency. The findings indicate that bank compliance with corporate governance rules continues to improve, with average compliance increasing from 64.4 percent in 2017 to 75.7 percent in 2019. Board size, composition, and chairman duality all have a negative but statistically insignificant relationship with ROE, ROA, and DY, according to the random effect regression model. In all three models, the audit Committee has a positive and statistically significant relationship with performance. The study recommends that the Bank of Ghana and the Ghana Securities and Exchange Commission maintain their current corporate governance enforcement to ensure compliance at 100%. Banks should ensure that their audit committees are independent and equipped with the necessary logistics and personnel to function effectively