Governance in Lebanese Banks: An Exploratory Research Before theCOVID-19 Era

Abstract

Banks locally and abroad have been subject to several financial crises which led top managers to look critically at
their current practices in managing the financial resources in order to avoid losses and to prevent giving a negative
image to the community of their customers. Parallel to the aforementioned events, banks have been observing an
evolution of the banking investment activities in addition to the transformation of the financial market into an open
market system.
The different events characterized by higher risks and higher demands for financial services have incited banks to
explore and emphasize the importance of governance principles. In this study, the researchers will expose the
importance of governance and its main principles in the banking systems. The study will also address the
aforementioned pertinent to its implementation according to the activities of Basel Committee on banking
supervision. The aim of the study is to assess via a quantitative approach the actual governance practices within a
convenient sample of Lebanese banks. The outcomes show that the selected banks abide by the principles of
Corporate Governance required byBasel as well as by the Central Bank of Lebanon. Results also address the effect
of sound governance on the performance of the Banks in question. Findings will serve to issue recommendations
about best practices and to encourage the adoption of sound decisions to adopt Corporate Governance principles.