Corporate governance practices and the role of the board of directors: Evidence from UAE conventional and Islamic banks

Abstract

The purpose of this study is to examine the United Arab Emirates (UAE) national banks’ practices of corporate governance regarding the role of the board of directors in the formulation and implementation of bank policies and strategies. A questionnaire has been developed using established reliable and valid measures of certain characteristics of corporate governance with minor modifications to fit the context. The results indicate that the UAE banks’ board of directors are satisfied with the compensation system; they are aware of the importance of the relationship with the shareholders; they understand and develop a good relationship with stakeholders; the composition of the UAE banks’ board of directors is appropriate; meetings of the UAE banks’ board of directors are effective and productive; the UAE banks’ board of directors are satisfied with the chairman’s leadership skills and performance; and finally, the UAE banks’ board of directors are aware of the requirements of corporate governance practices. Furthermore, the results indicate that there is a significant positive relationship between the role of the UAE banks’ board of directors and their education background, as well as their experience, compensation and corporate governance awareness. In addition, the statistical results confirmed that there is no significant difference in the role of the board of directors between the UAE conventional banks and Islamic banks