Abstract

Purpose:

The study investigates the effect of eight conventional governance mechanisms, namely (board size, CEO duality, audit committee (AUDC) size, AUDC independence, board structure, AUDC number of meetings, board gender, and external audit quality), on financial performance for a sample of 246 non-financial listed firms in GCC countries from 2015-2019.

Design/methodology/approach:

Several models have been run using “Hierarchical Multiple Regression” for six GCC countries.

Findings:

The study has revealed different results for example, board size, AUDC size and AUDC number of meetings have insignificant effect on firm performance in most GCC countries. In contrast, board gender and board structure are the most determining factors of financial performance in GCC countries.

Research limitations/implications:

The results of the study call for legislative amendments that would urge companies to increase the number of non-executive members and empower females to effectively participate in corporate boards through the quota system.

Originality/Significance:

The current study is one of the few studies on governance in emerging Islamic markets, and therefore it contributes to the accounting literature by identifying the characteristics of governance in these countries.

Practical and Social implications:

Regulators should visit Islamic corporate governance rules and practices in financial institutions to improve conventional corporate governance in nonfinancial firms

KAUJIE Classification:

G1

JEL Classification:

M38, M48, G34

Keywords

Board Governance, Audit Committee Features, Financial Performance, GCC Stock Markets.