The Governance and Performance of Financial Institutions in Lebanon

Recent controversy on the issue of corporate governance in relation to banking firm performance is at the origin of this book. Particularly, the puzzling role of corporate governance practices within an emerging economy such as Lebanon and its contribution in improving supervision adopted by local banking authorities are important. In the unique context of Lebanon and its cultural diversity, we analyzed the influence of the board of directors’ composition and characteristics (outside directors, board size, leadership duality, foreign directors, and firm political connections) as well as the ownership structure (managerial ownership, ownership concentration, family ownership, foreign owner, and institutional owner) on the financial performance of banks operating in Lebanon. Our empirical results showed a strong link between corporate governance and bank operating performance. Results are valuable to policy makers, bankers, and scholars seeking the stability of the Lebanese banking sector which represents the last standing corner stone in the local economy.