Influence of Corporate Governance on Bank Performance: A Comparative Analysis of Ghana and Sierra Leone Banks

Abstract

The purpose of this study is to comparatively analyse the influence of corporate governance (ownership structure) on banks performance in Ghana and Sierra Leone. Three categories of ownership structure (board, foreign, and Government) are used. The performance of the banks is measured using various profitability ratios such as Return on Assets (ROA), Return on Equity
(ROE) and Net Interest Margin (NIM). Secondary data are collected from published financial statements of commercial banks in Ghana and Sierra Leone. Data are collected on eighteen banks in Ghana and seven in Sierra Leone. A multiple regression analysis was used to analyze the data. One of the results revealed that there is a significant relationship between banks
ownership structure and its performance. Hence, it is concluded among others that executing good, sound and effective corporate governance practices will enhance bank performance as measured by its return on assets, return on equity and net interest margin. It is, therefore, recommended that Ghana and Sierra Leone should build confidence in investors and other
stakeholders through reforms in corporate governance, financial reporting and corporate laws.