Corporate governance and bank Performance: The moderating role of contemporary financial reporting practices

Abstract

This research examined how corporate governance impacts the performance of listed banks in Ghana and explored the moderating influence of modern financial reporting practices. The study utilized the annual reports spanning from 2011 to 2020 of eight banks listed on the Ghana Stock Exchange. Employing an explanatory research design, the study explored the financial performance metrics (ROA, ROE, and EPS) of the listed Ghanaian banks. It aimed to analyze the relationships and impact of corporate governance factors (specifically board size, board composition, and board independence) and assessed the moderating effect of contemporary financial reporting practices. Findings from the study showed that board size (number of directors) had an insignificant relationship with ROA, ROE, and EPS. Again, the composition of the board (executive vs. non-executive directors) showed no significant relationship with ROA, ROE, or EPS. Moreover, board independence had a significant negative relationship with ROA and ROE, but no significant relationship with EPS. Also, there was a negative connection between contemporary financial reporting (accounting quality) and bank performance (ROA, ROE, and EPS, whereas the moderating factor of contemporary financial reporting did not significantly influence the relationship between corporate governance and bank performance. Based on the findings, the study recommends that banks in Ghana should focus on other aspects of corporate governance and management to enhance performance.