Authors: Andreas Koutoupis, Panagiotis Kyriakogkonas, Michail Pazarskis

Title: Exploring the interrelation between Corporate Governance & Financial Performance: Evidence from Greek Systemic Banks

Abstract

In recent years significant changes have been made in the business context, both at national and international level, in many cases, without the existence of an appropriate regulatory framework. These changes had had a significant impact not only on the business itself, but also on the markets and on various stakeholders, both within and outside the business, and have led to the need to establish or strengthen relevant regulatory frameworks with a view to regulating changes in the business environment. This paper reviews the literature on corporate governance in the banking sector. Our research focuses on the impact of Corporate Governance Regulations on the financial performance of systemic banks of Greece, as measured by ROA and ROE indices, basic principles of sound corporate governance such as the duality of positions of the Chairman of the Board of Directors and the CEO, the existence of Independent members to the Board of Directors, and the establishment of corporate governance committees, for a period of 10 years. The results of our research showed a positive relationship between the financial performance of banks as measured by the ROA and ROE indices and the existence of independent members on the Board of Directors and the establishment of corporate governance committees, and a negative relationship between the financial performance of banks as measured by the ROA and ROE indices and the duality of positions of the Chairman of the Board of Directors and the CEO.
Keywords: Corporate Governance, Board of Directors, Committees, Financial performance, Independent Board members, systemic banks