Corporate Governance and Accounting Performance: A Balanced Scorecard Approach

Mona A. ElBannan, Mohamed A. ElBannan


This paper is motivated by the financial reform plan implemented in the Egyptian banking sector to enforce good corporate governance practices and improve performance. The study examines the association between governance quality and performance by estimating OLS regression models to test this relation. We measure governance as a multidimensional composite index comprised of board and ownership structure characteristics, while bank performance is measured using the Balanced Scorecard approach including financial and non-financial measures. Empirical evidence shows that governance has positive and significant impact on Egyptian bank performance. In particular, for the board structure, evidence shows that more executive directors on the board will enhance employee’s productivity. We find that board size is an insignificant determinant for bank performance; however, small board size is a significant determinant for better customer-related performance and improved employee productivity. CEO/Chairman duality is unrelated to bank performance, financial and non-financial performance. As for ownership structure, direct foreign investment in Egyptian banks should be encouraged, as there is evidence that foreign ownership has favorable impact on bank performance especially on employee productivity. Ownership concentration adversely affects bank performance index, and has unfavorable effect on employee productivity. Finally, institutional ownership is a marginal determinant of employee productivity.

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Accounting and Finance Research
ISSN 1927-5986 (Print)   ISSN 1927-5994 (Online) Email:

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