Corporate governance, national culture and bank performance: evidence from MENA countries

Purpose Despite global economic liberalization, the Middle East and North Africa (MENA) banking sector remains uncompetitive and resistant to globalization. This study aims to extend corporate governance (CG) literature by examining the interplay between CG, national culture and bank performance, using data from listed banks in MENA countries. Design/methodology/approach This research analyzes 1,920 bank-year observations from 124 banks across 13 MENA countries from 2009 to 2023. National culture data was sourced from Hofstede’s index, and panel data techniques were used to account for individual heterogeneity and endogeneity issues. Findings Empirical results reveal that larger boards, well-structured committees with nonexecutive directors, fewer board meetings and limited involvement of independent directors significantly enhance bank performance. These governance structures align with key cultural traits such as high power distance, collectivism and uncertainty avoidance, which favor hierarchical decision-making, group consensus and stability. Practical implications This study provides practical insights for policymakers aiming to improve banking sector performance in MENA by aligning CG frameworks with cultural values. Recommendations include forming larger, well-structured boards and adapting decision-making processes to reflect the region’s preference for stability and collaboration. These insights can serve as a practical guide for improving governance systems in MENA and beyond. Originality/value While previous studies have explored the impact of CG and national culture on banking, this study is the first, to the best of the authors’ knowledge, to integrate both factors within the MENA context, offering a comprehensive perspective on their combined impact on bank performance.