Corporate governance practices and the role of the board of directors: Evidence from UAE conventional and Islamic banks

Abstract

The purpose of this study is to examine the United Arab Emirates (UAE) national banks’ practices of corporate governance regarding the role of the board of directors in the formulation and implementation of bank policies and strategies. A questionnaire has been developed using established reliable and valid measures of certain characteristics of corporate governance with minor modifications to fit the context. The results indicate that the UAE banks’ board of directors are satisfied with the compensation system; they are aware of the importance of the relationship with the shareholders; they understand and develop a good relationship with stakeholders; the composition of the UAE banks’ board of directors is appropriate; meetings of the UAE banks’ board of directors are effective and productive; the UAE banks’ board of directors are satisfied with the chairman’s leadership skills and performance; and finally, the UAE banks’ board of directors are aware of the requirements of corporate governance practices. Furthermore, the results indicate that there is a significant positive relationship between the role of the UAE banks’ board of directors and their education background, as well as their experience, compensation and corporate governance awareness. In addition, the statistical results confirmed that there is no significant difference in the role of the board of directors between the UAE conventional banks and Islamic banks

Education strategy misfit, board effectiveness and Indonesian Islamic bank performance

“…Table V panel C reports that the estimated coefficient ( γ 2 ) for BoC and SSB effectiveness (BOARD) shows a positive and significant association with Islamic income. This finding supports Haniffa and Hudaib’s (2006) and Al-Tamimi and Charif’s (2013) studies that BoC plays a vital role in strategy formulation and strategic policy decisions. Likewise, the SSB’s role is important to ensure revenues and profits earned following the principles of sharia (Ghayad, 2008).…”

“…This result also indicates that the CEOs of Islamic banks need to draw upon that obtained from when the Islamic bank was still a business unit. The board should cooperate with all of the Islamic bank stakeholders (Schmidt and Brauer, 2006; Ghayad, 2008; Al-Tamimi and Charif, 2013).…”

“…There are a number of board attributes and characteristics that are able to minimise agency conflict and agency cost and, in the long run, enhance corporate value and performance (Haniffa and Hudaib, 2006). The board plays a significant role in monitoring Islamic bank performance because of its knowledge of fiqh muamalah [1] and the business process helps Islamic banks to operate in accordance with sharia principles (Ghayad, 2008; Al-Tamimi and Charif, 2013). Based on this argument, an analysis of board effectiveness is essential to understanding the role it plays in reducing or limiting the negative impact of misfit on performance.…”

“…Previous studies have also shown that the effectiveness of the corporate board influences the implementation of the strategy and corporate performance (Fama, 1980;Zahra and Pearce, 1989;Adams and Mehran, 2005;Usamah, 2010;Al-Tamimi and Charif, 2013). There are a number of board attributes and characteristics that are able to minimise agency conflict and agency cost and, in the long run, enhance corporate value and performance (Haniffa and Hudaib, 2006).…”

Nudging Toward Diversity in the Boardroom: A Systematic Literature Review of Board Diversity of Financial Institutions

“…One paper is a review and the remaining three studies are non-empirical and focus on the following: progress of ethnic diversity United Kingdom's top corporate boardrooms (Singh, 2007), the political effect on the international financial system (Degtyarev, 2016), and bank board regulation (Enriques & Zetzsche, 2015). Of 87 quantitative research studies, four studies employ survey data (Al-Tamimi & Charif, 2013;Jamali, Safieddine, & Daouk, 2007;Pearce, 1995), whereas the others use archival data (84 papers), and one paper exploits a combination of archival and survey data (García-Meca et al, 2015).…”