Impact of Chief Executive Officers (CEO) Duality on Financial Performance of Commercial Banks in Ethiopia

Résumé

Abstract The main objective of this study is to examine the relationship between the Chief Executive Officer (CEO) duality and the financial performance of commercial banks in Ethiopia. 12 commercial banks are included in this study among 17 banks in Ethiopia based on their financial report of 10 years for the period of 2009 to 2018. Five banks have not been included in the sample selection since one bank is a development bank and the other four commercial banks are newly established. The secondary data have been accrued from the National Bank of Ethiopia with banks' financial performance and primary data have been gathered from selected commercial banks using survey questionnaires concerning corporate structure. It uses panel data on financial performance measured by Return on Equity (ROE), Return on Asset (ROA), and Net Interest Margin (NIM). To analyze data E-View 9 Statistics was used. Both multiple regression and correlation were used to determine the relationship between the Chief Executive Officers (CEO) duality and financial performance of commercial banks in Ethiopia. The study investigated that half of the banks chief executive officers hold the position of chairman The correlation result indicate that Chief Executive Officer (CEO) duality has a positively and statistically insignificant relationship with the financial performance of commercial banks as measured by Return on Equity (ROE) (0.013), there is a negative relationship between Chief Executive Officers (CEO) Duality (-0.231) and the financial performance as measured by Return on Assets (ROA). There is a negative relationship between Chief Executive Officer (CEO) duality (-0.043) and the financial performance as measured by Net Interest Margin (NIM).

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