Corporate governance : an empirical approach

Abstract

The Lebanese Banking sector is one of the most developed industries in the country. Over the past decade an exponential increase in demand for banking products has lead to the substantial growth of the industry. Consequently, a strong monitoring is needed to protect this industry from any endogenous and-or exogenous threat. In this manner, BDL has implemented several circulars regarding the adoption of sound corporate governance rules. Thus, Lebanese banks are witnessing a strong growth with a sound protective shield. However, how well is this governance implemented? Is it helping Lebanese banks to grow even more, or is it refraining them from any potential progress? In this regard, this project will collect qualitative data from those banks, based on their annual reports, and will convert them to quantitative aspects and compare them to their respective RoE. This project finds that properly implementing governance rules will in fact increase the banks’ RoE’s, and thus their value in a parallel manner. The remaining of the Lebanese economic sectors should take this, as an indication of the degree the governance implementation is beneficial for their business value.