Corporate governance does affect bank profitability: evidence from Lebanon

Abstract

This study examines the impact of corporate governance on the profitability of six Lebanese listed banks between 2008-2012. Performance is measured by ROE and ROA whereas corporate governance is based on 14 variables, in addition to size as a control variable. ROA was found to be the best measure of performance with six significant variables. More specifically, bank's performance is positively related to board independence and number of board meeting and negatively related to separate leadership and audit committee members. A non-linear relationship exists between performance and board size, suggesting the presence of an optimal size for board members.