Does corporate governance affect financial performance in the banking sector?

This study examines the relationship between corporate governance variables and financial performance of all listed banks in Saudi Arabia. The annual reports for all listed banks in Saudi Arabia for years 2009 and 2012 have been analysed. The study uses six different variables of corporate governance and three measures of financial performance. The results of this study show that board size, board independence and bank size have a significant positive relationship with banks' financial performance, whereas ownership concentration and leverage ratio have a significant negative association with banks' financial performance. However, the CEO status, audit committee size and audit committee independence are not related to banks' financial performance.