Corporate Governance and Bank Performance: Evidence from Jordanian Banking Industry

Based on a sample of 14 banks listed on Amman Stock Exchange market over the period 1997 to 2006, this paper investigates the influence corporate governance (namely: ownership structure, board composition, and board size), and bank performance using a linear regression analysis. The results show that ownership structure and board composition have a strong impact on the bank performance. Results indicate that banks with institutional majority ownership have the highest performance and that as manager's and board members' ownership percentages increase the bank becomes more efficient. Surprisingly, board size has no effect on bank's performance.