Board characteristics and financial performance of listed banks: A comparative study of North African countries

Abstract

This study investigates the impact of internal corporate governance mechanisms on the financial performance of listed banks in North Africa, covering Morocco, Tunisia, Algeria, and Egypt over the period 2016–2023. Focusing on six board-related governance dimensions (board structure, board size, number of board committees, audit committee size, board independence, and meeting frequency) alongside firm size as a control variable, the study aims to provide robust comparative evidence across institutionally diverse banking systems (Assfaw & Sharma, 2024; Olowofela et al., 2025). Financial performance is measured using return on assets (ROA) and return on equity (ROE). Employing a multi-stage econometric strategy based on fixed-effects panel models and two-stage least squares (2SLS) estimations, the analysis accounts for unobserved heterogeneity and potential endogeneity concerns. The results show that board committees, audit committee size, meeting frequency, and firm size positively affect bank performance, whereas larger boards negatively influence performance due to coordination inefficiencies. Board independence and structural separation of leadership roles show no robust impact. Cross-country differences are pronounced, highlighting the moderating role of institutional and regulatory environments. These findings show that effective governance in emerging banking systems depends on oversight quality, board engagement, and institutional context. The study offers multi-country evidence and practical insights for North African banks.