Corporate Governance, Performance and Liquidity Risk of West African Economic and Monetary Union (WAEMU) Banks

Alassane Ouattara (1) , Luc Paugam (2) , Olivier Ramond (3)

1 IRG - Institut de Recherche en Gestion
2 ESSEC Business School
3 DRM - Dauphine Recherches en Management

This chapter examines the relation between corporate governance mechanisms and operating performance and liquidity risk within the specific environment of West African Economic and Monetary Union (WAEMU) banks. The implementation of well-known western corporate governance mechanisms in emerging markets, which mostly focus on unsophisticated financial services, is likely to act more as operating constraints than value-creation factors. Based on a sample drawn from 98 commercial banks over the period 2006–2010, we document the following three main findings: (1) dual structure and board size are significantly negatively associated with banks' performance as proxied by Return on Assets (ROA) and Return on Equity (ROE), (2) dual structure and board diversity exhibit a significant negative relation with banks' liquidity risk, (3) the presence of chief executive officer (CEO) in the board of directors appears to be the only corporate governance mechanism efficiently associated with banks' liquidity risk.

Mots clés: Corporate Governance; Financial Institutions; Operating Performance; Liquidity Risk; WAEMU

Domaines: Gestion et management

Alassane Ouattara, Luc Paugam, Olivier Ramond. Corporate Governance, Performance and Liquidity Risk of West African Economic and Monetary Union (WAEMU) Banks. World Scientific Publishing. Ouattara, A, Paugam, L, Ramond, O. (2014). Corporate Governance, Performance and Liquidity Risk of West African Economic and Monetary Union (WAEMU). In: Sabri Boubaker and Duc K. Nguyen (Eds.), Corporate Governance and Corporate Social Responsibilty: Emerging Markets Focus, World Scientific Publishing, pp. 287-318, , 2014, Corporate Governance and Corporate Social Responsibilty: Emerging Markets Focus, ISBN: 978-981-4520-37-9 ⟨10.1142/9789814520386_0011⟩. ⟨hal-01385140⟩