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

Impact of Chief Executive Officers (CEO) Duality on Financial Performance of Commercial Banks in Ethiopia | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Impact of Chief Executive Officers (CEO) Duality on Financial Performance of Commercial Banks in Ethiopia Workinesh Kebede Gebrayes, Addisu Gemeda Edeit This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-1521426/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version 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). 1.Chief Executive officer (CEO) 2.Financial Performance 3.Corporate Governance I. Introduction The issue of corporate governance becomes international in the early 1980s. Corporate governance plays a vital role in macro and microeconomic stability for economic growth as well as social welfare. Therefore, international organizations give more attention and concern to this issue at the micro and macro levels. It is used to make a smooth relationship among shareholders, the board of directors, and top management in determining the direction and performance of the corporation. It is also defined [ 1 ] to include the structures, processes, cultures, and systems that engender the successful operation of organizations. The concept of corporate governance of banks and every large firm has been a priority on the policy agenda in the developed market economies for over a decade. The concept is gradually warming itself as a priority in the African continent [ 6 ]. According to [ 27 ], state that corporate governance is about putting in place the structure, processes, and mechanisms that ensure the firm is being directed and managed in a way that enhances long-term shareholder value through accountability of managers and enhancing firm performance. In other words, through such structure, processes, and mechanisms, the well-known agency problem (which results from the separation of ownership from management and leads to a conflict of interests within the firm) may be addressed so that the interests of managers can be aligned with those of the shareholders. Nowadays, most of the shareholders in the firm are seeking to be the board of directors to account for the financial performance of their organization in the business environment. The failure of substantial corporations around the world has paid attention to the performance and behavior of the board of directors of an organization. The Board of directors, found on the top management of the organization, is held responsible for the strategic direction that the organization takes. Effective corporate governance is having a very crucial background and affects the success of entrepreneurship. Ethiopia‘s location gives it strategic dominance as a jumping point in the Horn of Africa, close to the Middle East. Ethiopia is bordered by Eritrea to the North, Sudan to the West, Kenya to the South, Somalia to the East, and Djibouti to the Northeast. Ethiopia is landlocked and has been using neighboring Djibouti's main port for the last two decades. The country covers an area of 1,126,829 km². A population of more than 114 million inhabitants (in 2020) makes the country the second-most populous nation in Africa next to Nigeria. Ethiopia is the fastest-growing economy in Africa. However, it is also one of the poorest with a per capita income of $ 790. Ethiopia aims to reach lower-middle-income status by 2025. Ethiopia has registered remarkable economic performance with annual growth averaging 10.9% over the past ten years. This is double the Sub Sahara Africa and triples the world average growth over this period and has led to Ethiopia being rated as one of the fastest-growing economies in the world (UNDP, 2014). Ii. Statement Of The Problem The board of directors has an imperative task in lessening the agency costs that arise from the separation of ownership and decision control in corporations [8]. A chief executive officer (CEO) is the highest-ranking executive in a company, whose primary responsibilities include making major corporate decisions, managing the overall operations and resources of a company, acting as the main point of communication between the board of directors (the board) and corporate operations and being the public face of the company. A CEO's role varies from one company to another depending on the company's size, culture, and corporate structure. In large corporations, CEOs typically deal only with very high-level strategic decisions and those that direct the company's overall growth. In smaller companies, CEOs often are more hands-on and involved with day-to-day functions. CEOs can set the tone, vision, and sometimes the culture of their organizations. The major duties, responsibilities, and job description of a CEO include Communicating, on behalf of the company, with shareholders, government entities, and the public, leading the development of the company’s short-and long-term strategy, Creating and implementing the company or organization’s vision and mission, evaluating the work of other executive leaders within the company, including directors, vice presidents, and presidents, maintaining awareness of the competitive market landscape, expansion opportunities, industry developments, etc., ensuring that the company maintains high social responsibility wherever it does business, assessing risks to the company and ensuring they are monitored and minimized, setting strategic goals and making sure they are measurable and describable. The position of Chief Executive Officer and Chairperson of the Board is held by some person. Most organizations and companies permit the Chief Executive Officer to become the chairperson, which can cause a conflict of interest problems. [13] Established an optimistic and significant connection between performance and separation of the office of board chair and CEO. [28] Similarly commented that firms are more significant when different personnel takes up the office of the board, chair, and CEO. The consequences of the study of [17], put forward that boards that are prearranged to be more independent of the CEO are more effective in monitoring the corporate financial accounting procedure. According to [21], a board of directors dominated by the CEO is more likely to lack independence, which leads to increased agency discord and, ultimately, poor company results. The purpose of the present research is to investigate the effect of Chief Executive Officers (CEO) duality on the financial performance of commercial banks in Ethiopia which has a lack of consistency based on previously conducted researches. Furthermore, this research investigates to answer the following basic questions: 1. Is there any relationship between Chief Executive Officers (CEO) duality and financial performance of commercial banks as measured by Return on Equity (ROE? 2. Is there any relationship between Chief Executive Officer (CEO) duality and financial performance of commercial banks as measured by Return on Asset (ROA)? 3. How can be Chief Executive Officer (CEO) duality can affect the financial performance of commercial banks in Ethiopia as measured by Net Interest Margin (NIM)? Research Hypothesis Based on the above-mentioned research question, the following hypotheses have been formulated and tested. H 1 : There is a negative relationship between Chief Executive Officers (CEO) duality and the financial performance as measured by Return on Equity (ROE). H 2 : There is a negative relationship between Chief Executive Officers (CEO) duality and the financial performance as measured by Return on Assets (ROA). H 3 : There is a negative relationship between Chief Executive Officers (CEO) duality and the financial performance as measured by Net interest margin (NIM) Iii Review Of Related Literature Corporate Governance refers to how the power of a corporation is exercised in the corporation’s total portfolio of assets and resources to maintain and increase the shareholder value and satisfaction of other stakeholders in the context of its corporate mission. Empirical Review Board duality is defined as when the chief executive officer of the corporation is as well holding the function of the chairman of the board of directors. According to [2], executive duality refers to the organizational structure wherein the Chief Executive Officer (CEO) also serves as the chairman of the same firm's board of directors. [14] established an optimistic and significant connection between performance and separation of the office of board chair and CEO. [28] similarly commented that firms are more significant when different personnel takes up the offices‖ of the board, chair, and CEO. [16] confirmed that big and autonomous boards add to a firm‘s value, and the synthesis of the two offices unenthusiastically affects the firm‘s performance, as the firm has a lesser amount of access to debt finance. The consequences of the study of [17] put forward that boards that are prearranged to be more independent of the CEO are more effective in monitoring the corporate financial accounting procedure. [9] found that firms that separated the functions of board chair, and CEO had smaller debt ratios. Conflict of interest, the concentration of power, and reduced board independence are usually observed when the roles of CEO and Chairman of the board are exercised by the same individual, i.e. if no separation of chief executive officers and chairman of the company. According to [19], a board of directors dominated by the CEO is more likely to lack independence, which leads to increased agency discord and, ultimately, poor company results. According to [17], CEO Duality increases decision-making pace and efficiency eliminates disagreements on the board of directors and may have a positive impact on firm results. According to [3], [4], and [16], in the absence of separation between the chairman and executive officer, it is the cause for potential conflict between management and the board since gaining complete power. Effective leadership in the form of a capable Chief Executive Officer is considered critical for the organization's sustainability, and the CEO is one of the most powerful employees [11]. The agency theory postulates the divergent interests of shareholders and the management trustees who are entrusted with the management of affairs of the business [7], whereas the stewardship theory expects managers to be trustworthy and responsible trustees of the organizational assets for intrinsic satisfaction, challenging endeavors, exercise daily assigned duties and responsibilities to achieve appreciation from peers and higher authorities [4]. Furthermore, according to the resource dependence theory, directors are recruited based on explicit qualifications and technical experience [25]; [12]. According to existing research, CEOs' explicit personal characteristics can influence their behavior and decision-making process, which, in turn, influences firm performance ([13] In a bank, if there is no separation of powers between chief executive officers and chairman, i.e. direct duality, board meetings have a loophole to make policies which may unrestrained from his/her actions in the best interest of him/her. This automatically weakens the BOD's oversight power and roles, putting checks and balances, which are critical components of internal control and good corporate‖ governance, in jeopardy. According to [22] a board of directors dominated by the CEO is more likely to lack independence, which leads to increased agency discord and, ultimately, poor company results. [23] Investigated the effects of CEO duality on firm performance in Nigeria and found that CEO duality has no substantial impact on firm financial performance in Nigeria. [20] on the other hand, conducted an empirical study of the impact of CEO duality on the financial performance of listed companies in Nigeria and concluded that concentrating control in the hands of a single executive may have negative consequences. According to [3] the CEO duality creates a single focal point for the firm's leadership, resulting in an impression of firm stability and increased confidence in the business management and fostering better communication between the administration and the Board of Directors. To support this claim, [4] claims that CEO duality establishes solid, unambiguous leadership expressed in a unity of command and those firms with CEO duality make better and faster decisions, outperforming those with the two positions split. As a result, CEO Duality is anti-corporate governance and detrimental to the firm's overall success. The agency theory takes this stance. However, as previously mentioned, the stewardship theory supports CEO Duality as a central requirement for establishing a necessary and strong command chain at the top management of the company. According to [19], CEO Duality increases decision-making pace and efficiency eliminates disagreements on the board of directors and may have a positive impact on firm results. Iv Research Methods And Methodology The methodology of every research work includes the sources of data, methods of collecting data, and analysis and interpretation of data. To test the hypotheses developed for this research, the quantitative approach with panel data is adopted. It presents the research design, procedures of data collection, the sampling procedure and method of data analysis, and the measurements of the variables. This study investigates the impact of Chief Executive Officers (CEO) duality on the financial performance of commercial banks in Ethiopia on a sample of the data collected from 2009 to 2018. Although the total number of banks in Ethiopia is 17, five of them have not been included in the analysis due to one bank is a development bank and the other four banks are newly established. Therefore, 12 commercial banks are included in this study. This study employed the analysis of regression and correlation. The secondary data collected from the National bank of Ethiopia with banks' financial performance and primary data are collected from each selected bank regarding banks corporate structure. In the present study, accounting-based financial performance indicators are used as dependent variables. The three diverse financial performance pointers used as dependent variables in this study to examine the impact of Chief Executive Officers (CEO) duality on financial performance are Return on Equity (ROE), Return on Assets (ROA), and Net Interest Margin (NIM). Research Model ROE it = α 0 + ꞵ 1 CEO + e ROA it = α 0 + ꞵ 1 CEO + e NIM it = α 0 + ꞵ 1 CEO + e Where, ROE stands for Return on Equity, a proxy for banks profitability ROA stands for Return on Asset, a proxy for bank profitability NIM stands for Net Interest Margin, a proxy for bank profitability CEO stands for Chief Executive Officers duality e stands for the error term Analysis of Data Table 4.1 shows that the mean value of the financial performance of commercial banks as measured by ROA is 3.086 percent. This indicates that the sample commercial banks in Ethiopia on average earned Net Income before Tax (NIBT) of 3.086 percent of the total assets. Since ROA indicates the efficiency of the management of a company in generating NIBT from the resources of the institution, the higher ROA shows that the company is more efficient in using its resources. The maximum value of ROA is 6.70 and the minimum value of 0.000. That means the most profitable and least profitable banks among the sampled banks earned 0.067 Birr and 0.00 of net income for a single Birr invested in the assets of the firm respectively. ROA is an essential indicator for a bank as it shows investors how the company is behaving in terms of converting assets into net capital. As a result, it can be inferred that the higher the percentage, the better it is for a bank to generate income from its total assets. Return on Equity (ROE) is the amount of net income generated by a company as a percentage of its shareholder‘s equity. It measures the profitability of a company by showing how much net profit a company can generate with the money invested by shareholders. The ROE, which is measured by the Net Income after Tax (NIAT) divided by total shareholders’ equity, has a mean value of 24.841 percent. This implies that the sample commercial banks in Ethiopia on average earned 24.841 percent of each Birr invested in shareholders’ equity. Comparing results of the three financial performances as measured by ROE, ROA, and NIM with a mean value of 24.841, 3.086, and 5.198 percent respectively, the sample commercial banks are relatively better on ROE implying that the sample commercial banks are better in utilizing shareholders ‘equity capital. The maximum value of ROE is 77.71 and the minimum value is 0.000. The standard deviation of 12.169 shows that it varies by 12.169 from the average value of 24.841. Net Interest Margin (NIM) is the third indicator of banks' profitability and growth. It reveals how much the bank is earning in interest on its loans compared to how much it is paying out in interest on deposits. Net Interest Margin (NIM) is the spread of the interest earned and the interest expended by the bank. NIM, which is measured as net interest income‖ divided by the average asset, shows a mean ―value of 5.198 percent. This implies that the sample banks on average earned 5.198 percent net interest income of the total assets. The maximum value is 14.000 percent and the minimum value is 1.200 percent. The standard deviation of 2.484 percent shows that from its average value NIM fluctuates by 2.484. Meanwhile, NIM reflects how the bank covers its cost of service and the profitability of the bank, the higher the NIM show, the higher bank's profit and the more stable the bank is Table 4.2 shows the descriptive results of independent variable Chief Executive Officers (CEO) duality. When a Chief Executive Officer (CEO) is also the chairman of the board of directors, in addition to leading the firm at the highest level, this is referred to as duality. This independent variable is explained by whether the Chief Executive Officer ( CEO ) of the bank holds the position of the chairman of the board or not. It is a dummy variable. The value of 1 is given if holds the position of the chairman, otherwise, 0. The mean value of this variable is 0.508 with a maximum of 1.000 and a minimum of 0.000 (dummy variable) disclosing that half of the banks’ chief executive officers hold the position of chairperson in selected commercial banks in Ethiopia. The standard deviation of 0.502 implies that there is no deviation from the average mean. According to [20], the role of holding the position of chairman of a chief executive officer cannot be effectively performed by the board. The studies [15] revealed that chief executive officer duality has an unhelpful result on managerial performance. [7] & [13] argue that CEO duality may hinder the board's ability to monitor management and thereby increase the agency cost. According to [22] firms with a separate CEO and chairman consistently outperform firms with combined titles. The study conducted by [21] investigated the principal-agent conflict and concluded that there is a negative relationship between CEO duality and accounting performance measures in the banking industry. [5] using a panel of U.S. firms, find that CEO duality has a negative and significant impact on the operating performance of firms when independent directors account for a small proportion of the board. According to [10] separating the CEO and the chairman would increase the firm's performance since the board would have neutral power to oversee the CEO's duties. Results of Correlation Analysis A correlation coefficient in statistics is a quantitative assessment that measures both the direction and the strength of this tendency to vary together. There are different types of correlation that one can use for different kinds of data. For this study, the researchers used the most common type of correlation i.e. Pearson‘s correlation coefficient. The greater the absolute value of the correlation coefficient, the stronger the‖ relationship with the variables (dependent and independent). Table 4.3 shows that Chief Executive Officer (CEO) duality is 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). Result of Regression Analysis Regression is a statistical method used in finance, investing, and other disciplines that attempt to determine the strength and character of the relationship between one dependent variable (usually denoted by Y) and a series of other variables (known as independent variables). The dependent variables for this study are the financial performance of commercial banks in Ethiopia measured by ROE, ROA, and NIM and the independent variable Chief Executive Officers (CEO) duality. Table 4.4 shows that the Chief Executive Officer in the current study is explained by whether the chief executive officer holds the position of chairperson or not. It is a dummy variable. A score of 1 is given if the chief executive officer holds the position of chairperson, otherwise 0. As presented in Table 4.4, Chief Executive Officer is positively correlated with financial performance as measured by ROE 0.001 and statistically insignificant (p-value= 0.488). Chief Executive Officer duality is the independent variable in the present study as measured by whether the chief executive officer of the bank holds the position of the chairperson or not. It is a dummy variable. A score of 1 is given if the chief executive officer holds the position of chairperson, otherwise 0. From the fixed effect regression results (Table 4.5), the chief executive officer duality is negatively and insignificantly regressed with the financial performance of commercial banks as measured by return on assets. The coefficient value of chief executive officer (CEO) duality is -0.002 and its p-value of 0.222. Chief Executive Officer (CEO) duality is explained by whether the chief executive officer holds the position of chairperson or not. It is a dummy variable. A score of 1 is given if the chief executive officer holds the position of chairperson, otherwise 0. Based on the random effect regression model in Table 4.6, the coefficient of the chief executive officer is -0.422 and its p-value of 0.018. This shows that there is a negative and significant relationship between Chief Executive Officer Duality and the financial performance as measured by Net Interest Margin (NIM) of the sample commercial banks in Ethiopia at 5 % of the level of significance. The present study implies that holding all independent variables remain constant, as Chief Executive Officer duality increase by one, financial performance as measured by Net Interest Margin (NIM) of the sample commercial banks in Ethiopia is decreased on average by 0.422 percent. Conclusions Based on the analysis the researcher concludes that half of the bank's chief executive officers hold the position of chairman since the average mean shows 0.508 or 51%. The correlation result indicates that Chief Executive Officer (CEO) duality is 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). This result is supported by the regression result analyzed in Tables 4.4, 4.5 & 4.6. Recommendation The findings of the study point to on average 51% of chief executive officers hold the position of chairman in the commercial banks in Ethiopia. This leads to a negative relationship between Chief Executive Officers (CEO) Duality and the financial performance of commercial banks in Ethiopia as measured by Return on Assets (ROA) and Net Interest Margin (NIM). From this, the researcher recommends that the position of chief executive officers and the position of chairman should be separate in Commercial banks in Ethiopia. Abbreviations BOD Board of Director CEO Chief Executive Officers NIM Net Interest Margin ROA Return On Asset ROE Return On equity UNDP United Nations Development program Declarations Availability of data and materials The source of data and materials for this manuscript are primary and secondary data. The primary data have been gathered from selected commercial banks using survey questionnaires concerning corporate structure while secondary data have been accrued from the National Bank of Ethiopia with banks' financial performance. Competing Interest The authors declare that they have no known competing for financial interests or personal relationships that could have appeared to influence the work report in this paper. Funding There is no applicable funding information Authors’ contributions The contributions of authors are described in the following manner: Constructing an idea or hypothesis for the manuscript’Dr. Addisu’Autthor,planning methodology ’Workinesh’Athour, Literatures Review ’Workinesh’Author, Data collection and proccing ’Workinesh’Author, Organizing and Supervising the course of the article ‘Dr.Addisu’Author, taking responsibility in the construction of the whole of the article and reviewing the article before submission for spelling and grammar ’both’ Authors. Acknowledgments I would like to thank Ethiopian Commercial bank workers at each level for their cooperation and assistance by provide us the important data. Without their cooperation, the we would not have been completed this study in time. I would also like to express my sincere appreciation to the clients of the institution who provided us with relevant data and information by scarifying their precious time. 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ROA 120 3.086 6.700 0.000 0.973 ROE 120 24.841 77.710 0.000 12.169 NIM 120 5.198 14.000 1.200 2.484 Source: E-view 9 result Table 3: Summary of Descriptive Statistics for Independent Variables Independent Variable Observation Mean Maximum Minimum Std. Deviation CEO 120 0.508 1.000 0.000 0.502 Source: E-view 9 results. Table 4: Correlation analysis of ROE, ROA, and NIM with Chief Executive Officers (CEO) duality ROE ROA NIM CEO ROE 1.000 ROA 0.123 1.000 NIM 0.05 0.712 1.000 CEO 0.013 -0.231 -0.043 1.000 Source: E-view 9 results. Table 5: Regression results using ROE as a proxy of financial performance Independent Variable Dependent Variables Bank Financial Performance (ROE) Coefficient Std. Error P-Value Constant 0.129** 0.042 0.003 Chief Executive Officer Duality 0.001 0.001 0.488 R-Square 0.525 Adjusted R square 0.428 Standard error of the regression 0.007 F-Statistic 5.419 Prob. (F-Statistic) 0.000 Durbin-Watson stat 1.615 Source: E-view 9 result Table 6: Regression results using ROA as a proxy of financial performance Independent Variable Dependent Variable Bank Financial Performance (ROA) Coefficient Std. Error P-Value Constant 0.339 0.228 0.541 Chief Executive Officer Duality -0.002 0.002 0.222 R-Square 0.665 Adjusted R square 0. 597 Standard error of the regression 0.017 F-Statistic 9.737 Prob.(F-Statistic) 0.000 Durbin-Watson stat 1.254 Source: E-view 9 result Table 7: Regression results using NIM as a proxy of financial performance. Independent Variable Dependent Variable Bank Financial Performance (NIM) Coefficient Std. Error P-Value Constant -54.190* 12.982 0.001 Chief Executive Officer Duality -0.422** 0.175 0.018 R-Square 0.510 Adjusted R square 0. 476 Standard error of the regression 0.958 F-Statistic 7.364 Prob.(F-Statistic) 0.000 Durbin-Watson stat 1.409 Source: E-view 9 result Supplementary Files Table1.jpg Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. Our growing team is made up of researchers and industry professionals working together to solve the most critical problems facing scientific publishing. Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-1521426","acceptedTermsAndConditions":true,"allowDirectSubmit":true,"archivedVersions":[],"articleType":"Research","associatedPublications":[],"authors":[{"id":99084708,"identity":"c0b78c9c-504e-4c7e-a03d-527979d89abb","order_by":0,"name":"Workinesh Kebede Gebrayes","email":"data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAZAAAAAyAQMAAABI0h/eAAAABlBMVEX///8AAABVwtN+AAAACXBIWXMAAA7EAAAOxAGVKw4bAAAA4ElEQVRIiWNgGAWjYHACZgaGAxIMDOwNQLaBBSlaeA6AtEgQrQVISSSAOERoMTje+9jgwxmLxP6Zz69u+FEgwcDf3p2AX8uZ48aJM25IJM64nVN2swfoMIkzZzfg1WJ2I435MM8HicSG2zlpN3iAWgwkcglouf+M+fAfoJb5N8+k3fxDlJYbbMzJDECHbbjBfuw2UbbYn0ljNuw5I2G88UwO220ZAwkegn6RbD/GLPHjWJ3svOPHn91888dGjr+9F78WGHBsYOAxADF4iFIOdiAwxTwgWvUoGAWjYBSMLAAAQcJNkKPlvcwAAAAASUVORK5CYII=","orcid":"","institution":"Ambo University","correspondingAuthor":true,"submittingAuthor":false,"prefix":"","firstName":"Workinesh","middleName":"Kebede","lastName":"Gebrayes","suffix":""},{"id":99084709,"identity":"cc5d46af-3f2c-44b6-bd2d-6bcdebb52b67","order_by":1,"name":"Addisu Gemeda Edeit","email":"","orcid":"","institution":"Ambo University","correspondingAuthor":false,"submittingAuthor":false,"prefix":"","firstName":"Addisu","middleName":"Gemeda","lastName":"Edeit","suffix":""}],"badges":[],"createdAt":"2022-04-04 10:34:17","currentVersionCode":1,"declarations":"","doi":"10.21203/rs.3.rs-1521426/v1","doiUrl":"https://doi.org/10.21203/rs.3.rs-1521426/v1","draftVersion":[],"editorialEvents":[],"editorialNote":"","failedWorkflow":false,"files":[{"id":31856469,"identity":"3e13d2c4-06ab-4412-9a86-babc36a1a038","added_by":"auto","created_at":"2023-01-20 12:24:09","extension":"pdf","order_by":0,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":347202,"visible":true,"origin":"","legend":"","description":"","filename":"manuscript.pdf","url":"https://assets-eu.researchsquare.com/files/rs-1521426/v1/e880b4e8-a6e0-4192-a434-f19b56b8e3b1.pdf"},{"id":20559995,"identity":"ddad8275-0f55-49f9-820b-19464199401e","added_by":"auto","created_at":"2022-04-20 16:25:14","extension":"jpg","order_by":1,"title":"","display":"","copyAsset":false,"role":"supplement","size":51603,"visible":true,"origin":"","legend":"","description":"","filename":"Table1.jpg","url":"https://assets-eu.researchsquare.com/files/rs-1521426/v1/947441fac4eafbab6edafe63.jpg"}],"financialInterests":"","formattedTitle":"Impact of Chief Executive Officers (CEO) Duality on Financial Performance of Commercial Banks in Ethiopia","fulltext":[{"header":"I. Introduction","content":"\u003cp\u003eThe issue of corporate governance becomes international in the early 1980s. Corporate governance plays a vital role in macro and microeconomic stability for economic growth as well as social welfare. Therefore, international organizations give more attention and concern to this issue at the micro and macro levels. It is used to make a smooth relationship among shareholders, the board of directors, and top management in determining the direction and performance of the corporation. It is also defined [\u003cspan class=\"CitationRef\"\u003e1\u003c/span\u003e] to include the structures, processes, cultures, and systems that engender the successful operation of organizations. The concept of corporate governance of banks and every large firm has been a priority on the policy agenda in the developed market economies for over a decade. The concept is gradually warming itself as a priority in the African continent [\u003cspan class=\"CitationRef\"\u003e6\u003c/span\u003e].\u003c/p\u003e\n\u003cp\u003eAccording to [\u003cspan class=\"CitationRef\"\u003e27\u003c/span\u003e], state that corporate governance is about putting in place the structure, processes, and mechanisms that ensure the firm is being directed and managed in a way that enhances long-term shareholder value through accountability of managers and enhancing firm performance. In other words, through such structure, processes, and mechanisms, the well-known agency problem (which results from the separation of ownership from management and leads to a conflict of interests within the firm) may be addressed so that the interests of managers can be aligned with those of the shareholders.\u003c/p\u003e\n\u003cp\u003eNowadays, most of the shareholders in the firm are seeking to be the board of directors to account for the financial performance of their organization in the business environment. The failure of substantial corporations around the world has paid attention to the performance and behavior of the board of directors of an organization. The Board of directors, found on the top management of the organization, is held responsible for the strategic direction that the organization takes. Effective corporate governance is having a very crucial background and affects the success of entrepreneurship.\u003c/p\u003e\n\u003cp\u003eEthiopia\u0026lsquo;s location gives it strategic dominance as a jumping point in the Horn of Africa, close to the Middle East. Ethiopia is bordered by Eritrea to the North, Sudan to the West, Kenya to the South, Somalia to the East, and Djibouti to the Northeast. Ethiopia is landlocked and has been using neighboring Djibouti\u0026apos;s main port for the last two decades. The country covers an area of 1,126,829 km\u0026sup2;. A population of more than 114\u0026nbsp;million inhabitants (in 2020) makes the country the second-most populous nation in Africa next to Nigeria.\u003c/p\u003e\n\u003cp\u003eEthiopia is the fastest-growing economy in Africa. However, it is also one of the poorest with a per capita income of \u003cspan\u003e$\u003c/span\u003e790. Ethiopia aims to reach lower-middle-income status by 2025. Ethiopia has registered remarkable economic performance with annual growth averaging 10.9% over the past ten years. This is double the Sub Sahara Africa and triples the world average growth over this period and has led to Ethiopia being rated as one of the fastest-growing economies in the world (UNDP, 2014).\u003c/p\u003e"},{"header":"Ii. Statement Of The Problem","content":"\u003cp\u003eThe board of directors has an imperative task in lessening the agency costs that arise from the separation of ownership and decision control in corporations [8]. A chief executive officer (CEO) is the highest-ranking executive in a company, whose primary responsibilities include making major corporate decisions, managing the overall operations and resources of a company, acting as the main point of communication between the board of directors (the board) and corporate operations and being the public face of the company. A CEO\u0026apos;s role varies from one company to another depending on the company\u0026apos;s size, culture, and corporate structure. In large corporations, CEOs typically deal only with very high-level strategic decisions and those that direct the company\u0026apos;s overall growth. In smaller companies, CEOs often are more hands-on and involved with day-to-day functions. CEOs can set the tone, vision, and sometimes the culture of their organizations. The major duties, responsibilities, and job description of a CEO include Communicating, on behalf of the company, with shareholders, government entities, and the public, leading the development of the company\u0026rsquo;s short-and long-term strategy, Creating and implementing the company or organization\u0026rsquo;s vision and mission, evaluating the work of other executive leaders within the company, including directors, vice presidents, and presidents, maintaining awareness of the competitive market landscape, expansion opportunities, industry developments, etc., ensuring that the company maintains high social responsibility wherever it does business, assessing risks to the company and ensuring they are monitored and minimized, setting strategic goals and making sure they are measurable and describable. The position of Chief Executive Officer and Chairperson of the Board is held by some person. Most organizations and companies permit the Chief Executive Officer to become the chairperson, which can cause a conflict of interest problems. [13] Established an optimistic and significant connection between performance and separation of the office of board chair and CEO. [28] Similarly commented that firms are more significant when different personnel takes up the office of the board, chair, and CEO. The consequences of the study of [17], put forward that boards that are prearranged to be more independent of the CEO are more effective in monitoring the corporate financial accounting procedure. According to [21], a board of directors dominated by the CEO is more likely to lack independence, which leads to increased agency discord and, ultimately, poor company results. The purpose of the present research is to investigate the effect of Chief Executive Officers (CEO) duality on the financial performance of commercial banks in Ethiopia which has a lack of consistency based on previously conducted researches. Furthermore, this research investigates to answer the following basic questions:\u0026nbsp;\u003c/p\u003e\n\u003cp\u003e1. \u0026nbsp;Is there any relationship between Chief Executive Officers (CEO) duality and financial performance of commercial banks as measured by Return on Equity (ROE?\u0026nbsp;\u003c/p\u003e\n\u003cp\u003e2. Is there any relationship between Chief Executive Officer (CEO) duality and financial performance of commercial banks as measured by Return on Asset (ROA)?\u003c/p\u003e\n\u003cp\u003e3. How can be Chief Executive Officer (CEO) duality can affect the financial performance of commercial banks in Ethiopia as measured by Net Interest Margin (NIM)?\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eResearch Hypothesis\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eBased on the above-mentioned research question, the following hypotheses have been formulated and tested.\u003c/p\u003e\n\u003cp\u003e\u0026nbsp;H\u003csub\u003e1\u003c/sub\u003e: There is a negative relationship between Chief Executive Officers (CEO) duality and the financial performance as measured by Return on Equity (ROE).\u003c/p\u003e\n\u003cp\u003e\u0026nbsp;H\u003csub\u003e2\u003c/sub\u003e: There is a negative relationship between Chief Executive Officers (CEO) duality and the financial performance as measured by Return on Assets (ROA).\u003c/p\u003e\n\u003cp\u003e\u0026nbsp;H\u003csub\u003e3\u003c/sub\u003e: There is a negative relationship between Chief Executive Officers (CEO) duality and the financial performance as measured by Net interest margin (NIM)\u003c/p\u003e"},{"header":"Iii Review Of Related Literature","content":"\u003cp\u003eCorporate Governance refers to how the power of a corporation is exercised in the corporation\u0026rsquo;s total portfolio of assets and resources to maintain and increase the shareholder value and satisfaction of other stakeholders in the context of its corporate mission.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eEmpirical Review\u0026nbsp;\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eBoard duality is\u0026nbsp;defined as when the chief executive officer of the corporation is\u0026nbsp;as well holding the function of the chairman of the board of directors. According to\u0026nbsp;[2], executive duality refers to\u0026nbsp;the organizational structure wherein the Chief Executive Officer (CEO) also\u0026nbsp;serves as the chairman of\u0026nbsp;the same firm\u0026apos;s board of directors. [14] established an optimistic and significant connection between performance and separation of the office of board chair and CEO. [28] similarly commented that firms are more significant when different personnel takes up the offices‖ of the board, chair, and\u0026nbsp;CEO.\u003c/p\u003e\n\u003cp\u003e[16] confirmed that big\u0026nbsp;and autonomous boards add to\u0026nbsp;a firm\u0026lsquo;s value, and the synthesis of\u0026nbsp;the two offices unenthusiastically affects the firm\u0026lsquo;s performance, as the firm has a lesser amount of access to debt finance. The consequences of\u0026nbsp;the study of\u0026nbsp;[17] put forward that boards that are prearranged to be\u0026nbsp;more independent of the CEO are more effective in\u0026nbsp;monitoring the corporate financial accounting procedure. [9] found that firms that separated the functions of\u0026nbsp;board chair, and CEO had smaller debt ratios. Conflict of interest, the concentration of\u0026nbsp;power, and reduced board independence are usually observed when the roles of CEO and Chairman of the board are exercised by the same individual, i.e. if no\u0026nbsp;separation of chief executive officers and chairman of\u0026nbsp;the company. According to\u0026nbsp;[19], a board of directors dominated by the CEO is\u0026nbsp;more likely to lack independence, which leads to\u0026nbsp;increased agency discord and, ultimately, poor company\u0026nbsp;results. According to [17], CEO Duality increases decision-making pace and efficiency eliminates disagreements on the board of directors and may have a positive impact on firm\u0026nbsp;results.\u003c/p\u003e\n\u003cp\u003eAccording to [3], \u0026nbsp;[4], and \u0026nbsp;[16], in the absence of separation between the chairman and executive officer, it is the cause for potential conflict between management and the board since gaining complete power. Effective leadership in the form of a capable Chief Executive Officer is considered critical for the organization\u0026apos;s sustainability, and the CEO is one of the most powerful employees [11]. The agency theory postulates the divergent interests of shareholders and the management trustees who are entrusted with the management of affairs of the business [7], whereas the stewardship theory expects managers to be trustworthy and responsible trustees of the organizational assets for intrinsic satisfaction, challenging endeavors, exercise daily assigned duties and responsibilities to achieve appreciation from peers and higher authorities [4]. Furthermore, according to the resource dependence theory, directors are recruited based on explicit qualifications and technical experience [25]; [12]. According to existing research, CEOs\u0026apos; explicit personal characteristics can influence their behavior and decision-making process, which, in turn, influences firm performance ([13] In a bank, if there is no separation of powers between chief executive officers and chairman, i.e. direct duality, board meetings have a loophole to make policies which may unrestrained from his/her actions in the best interest of him/her. This automatically weakens the BOD\u0026apos;s oversight power and roles, putting checks and balances, which are critical components of internal control and good corporate‖ governance, in jeopardy. According to [22] a board of directors dominated by the CEO is more likely to lack independence, which leads to increased agency discord and, ultimately, poor company results.\u003c/p\u003e\n\u003cp\u003e[23] Investigated the effects of CEO duality on firm performance in Nigeria and found that CEO duality has no\u0026nbsp;substantial impact on firm financial performance in\u0026nbsp;Nigeria. [20] on the other hand, conducted an empirical study of\u0026nbsp;the impact of CEO duality on the financial performance of\u0026nbsp;listed companies in\u0026nbsp;Nigeria and concluded that concentrating control in\u0026nbsp;the hands of a single executive may have negative consequences.\u003c/p\u003e\n\u003cp\u003eAccording to [3] the CEO duality creates a single focal point for the firm\u0026apos;s leadership, resulting in an impression of firm stability and increased confidence in the business management and fostering better communication between the administration and the Board of Directors. To support this claim, [4] claims that CEO duality establishes solid, unambiguous leadership expressed in a unity of command and those firms with CEO duality make better and faster decisions, outperforming those with the two positions split. As a result, CEO Duality is anti-corporate governance and detrimental to the firm\u0026apos;s overall success. The agency theory takes this stance. However, as previously mentioned, the stewardship theory supports CEO Duality as a central requirement for establishing a necessary and strong command chain at the top management of the company. According to [19], CEO Duality increases decision-making pace and efficiency eliminates disagreements on the board of directors and may have a positive impact on firm results.\u003c/p\u003e"},{"header":"Iv Research Methods And Methodology","content":"\u003cp\u003eThe methodology of every research work includes the sources of data, methods of collecting data, and analysis and interpretation of data. To test the hypotheses developed for this research, the quantitative approach with panel data is adopted. It presents the research design, procedures of data collection, the sampling procedure and method of data analysis, and the measurements of the variables. This study investigates the impact of Chief Executive Officers (CEO) duality on the financial performance of commercial banks in Ethiopia on a sample of the data collected from 2009 to 2018. Although the total number of banks in Ethiopia is 17, five of them have not been included in the analysis due to one bank is a development bank and the other four banks are newly established. Therefore, 12 commercial banks are included in this study. This study employed the analysis of regression and correlation. The secondary data collected from the National bank of Ethiopia with banks\u0026apos; financial performance and primary data are collected from each selected bank regarding banks corporate structure. In the present study, accounting-based financial performance indicators are used as dependent variables. The three diverse financial performance pointers used as dependent variables in this study to examine the impact of Chief Executive Officers (CEO) duality on financial performance are Return on Equity (ROE), Return on Assets (ROA), and Net Interest Margin (NIM).\u0026nbsp;\u003c/p\u003e\n\u003cp\u003eResearch Model\u0026nbsp;\u003c/p\u003e\n\u003cp\u003eROE\u003csub\u003eit\u003c/sub\u003e = \u0026alpha;\u003csub\u003e0\u003c/sub\u003e + ꞵ\u003csub\u003e1\u003c/sub\u003eCEO + e\u003c/p\u003e\n\u003cp\u003eROA\u003csub\u003eit\u003c/sub\u003e = \u0026alpha;\u003csub\u003e0\u003c/sub\u003e + ꞵ\u003csub\u003e1\u003c/sub\u003e CEO + e\u003c/p\u003e\n\u003cp\u003eNIM\u003csub\u003eit\u003c/sub\u003e = \u0026alpha;\u003csub\u003e0\u003c/sub\u003e + ꞵ\u003csub\u003e1\u003c/sub\u003e CEO + e\u003c/p\u003e\n\u003cp\u003eWhere,\u0026nbsp;\u003c/p\u003e\n\u003cp\u003eROE stands for Return on Equity, a proxy for banks profitability\u003c/p\u003e\n\u003cp\u003eROA stands for Return on Asset, a proxy for bank profitability\u0026nbsp;\u003c/p\u003e\n\u003cp\u003eNIM stands for Net Interest Margin, a proxy for bank profitability\u003c/p\u003e\n\u003cp\u003eCEO stands for Chief Executive Officers duality\u003c/p\u003e\n\u003cp\u003ee stands for the error term\u0026nbsp;\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eAnalysis of Data\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eTable 4.1 shows that the mean value of the\u0026nbsp;financial performance of\u0026nbsp;commercial banks as measured by ROA is\u0026nbsp;3.086 percent. This indicates that the sample commercial banks in\u0026nbsp;Ethiopia\u0026nbsp;on average earned Net Income before Tax (NIBT) of 3.086 percent of the total assets. Since\u0026nbsp;ROA indicates the efficiency of the management of a company in\u0026nbsp;generating NIBT from the resources of the institution, the higher ROA shows that the company is\u0026nbsp;more efficient in\u0026nbsp;using its resources. The maximum value of ROA is\u0026nbsp;6.70 and the minimum value of\u0026nbsp;0.000. That means the most\u0026nbsp;profitable and least profitable banks among the sampled banks earned 0.067 Birr and 0.00 of net income for a single Birr invested in\u0026nbsp;the assets of the firm respectively. ROA is\u0026nbsp;an\u0026nbsp;essential indicator for a bank\u0026nbsp;as it\u0026nbsp;shows investors how the company is\u0026nbsp;behaving in\u0026nbsp;terms of\u0026nbsp;converting assets into net capital. As\u0026nbsp;a result, it\u0026nbsp;can be\u0026nbsp;inferred that the higher the percentage, the better it is\u0026nbsp;for a bank to\u0026nbsp;generate income\u0026nbsp;from its total\u0026nbsp;assets.\u003c/p\u003e\n\u003cp\u003eReturn on Equity (ROE)\u0026nbsp;is the amount of net income generated by a company as a percentage of its shareholder\u0026lsquo;s equity. It measures the profitability of a company by showing how much net profit a company can generate with the money invested by shareholders. The ROE, which is measured by the Net Income after Tax (NIAT) divided by total shareholders\u0026rsquo; equity, has a mean value of 24.841 percent. This\u0026nbsp;implies that the sample commercial banks in\u0026nbsp;Ethiopia\u0026nbsp;on average earned 24.841 percent of each Birr invested in\u0026nbsp;shareholders\u0026rsquo; equity. Comparing results of the three financial performances as measured by ROE, ROA, and NIM with a mean value of\u0026nbsp;24.841, 3.086, and 5.198 percent respectively, the sample commercial banks are relatively better on ROE implying that the sample commercial banks are better in\u0026nbsp;utilizing shareholders \u0026lsquo;equity capital. The maximum value of\u0026nbsp;ROE is\u0026nbsp;77.71 and the minimum value is\u0026nbsp;0.000. The standard deviation of 12.169 shows that it\u0026nbsp;varies by 12.169 from the average value of\u0026nbsp;24.841.\u003c/p\u003e\n\u003cp\u003eNet Interest Margin (NIM) is the third indicator of banks\u0026apos; profitability and growth. It reveals how much the bank is earning in interest on its loans compared to how much it is paying out in interest on deposits. Net Interest Margin (NIM) is the spread of the interest earned and the interest expended by the bank. NIM, which is measured as net interest income‖ \u0026nbsp; divided by the average asset, shows a mean ―value of 5.198 percent. This implies that the sample banks on average earned 5.198 percent net interest income of the total assets. The maximum value is 14.000 percent and the minimum value is 1.200 percent. The standard deviation of 2.484 percent shows that from its average value NIM fluctuates by 2.484. Meanwhile, NIM reflects how the bank covers its cost of service and the profitability of the bank, the higher the NIM show, the higher bank\u0026apos;s profit and the more stable the bank is\u003c/p\u003e\n\u003cp\u003eTable 4.2 shows the descriptive results of independent variable Chief Executive Officers (CEO) duality. When a Chief Executive Officer (CEO) is also the chairman of the board of directors, in addition to leading the firm at the highest level, this is referred to as duality. This independent variable is explained by whether the \u003ca href=\"https://www.mbabrief.com/what_is_chief_executive_officer.asp\"\u003eChief Executive Officer\u0026nbsp;\u003c/a\u003e(\u003ca href=\"https://www.mbabrief.com/what_is_ceo.asp\"\u003eCEO\u003c/a\u003e) of the bank holds the position of the \u003ca href=\"https://www.mbabrief.com/what_is_chairman_of_the_board.asp\"\u003echairman of the board\u0026nbsp;\u003c/a\u003eor not. It is a dummy variable. The value of 1 is given if holds the position of the chairman, otherwise, 0. The mean value of this variable is 0.508 with a maximum of 1.000 and a minimum of 0.000 (dummy variable) disclosing that half of the banks\u0026rsquo; chief executive officers hold the position of chairperson in selected commercial banks in Ethiopia. The standard deviation of 0.502 implies that there is no deviation from the average mean. According to [20], the role of holding the position of chairman of a chief executive officer cannot be effectively performed by the board. The studies [15] revealed that chief executive officer duality has an unhelpful result on managerial performance. \u003ca href=\"https://www.sciencedirect.com/science/article/pii/S0970389618300326#bib0065\"\u003e[7]\u0026nbsp;\u003c/a\u003e\u0026amp; [13] argue that CEO duality may hinder the board\u0026apos;s ability to monitor management and thereby increase the agency cost. According to [22] firms with a separate CEO and chairman consistently outperform firms with combined titles. The study conducted by [21] investigated the principal-agent conflict and concluded that there is a negative relationship between CEO duality and accounting performance measures in the banking industry. [5] using a panel of U.S. firms, find that CEO duality has a negative and significant impact on the operating performance of firms when independent directors account for a small proportion of the board. According to [10] separating the CEO and the chairman would increase the firm\u0026apos;s performance since the board would have neutral power to oversee the CEO\u0026apos;s duties.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eResults of\u0026nbsp;Correlation\u0026nbsp;Analysis\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eA correlation coefficient in statistics is a quantitative assessment that measures both the direction and the strength of this tendency to vary together. There are different types of correlation that one can use for different kinds of data. For this study, the researchers used the most common type of correlation i.e. Pearson\u0026lsquo;s correlation coefficient. The greater the absolute value of the correlation coefficient, the stronger the‖ relationship with the variables (dependent and independent). Table 4.3 shows that Chief Executive Officer (CEO) duality is 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) \u0026nbsp;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).\u0026nbsp;\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eResult of\u0026nbsp;Regression\u0026nbsp;Analysis\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eRegression is a statistical method used in finance, investing, and other disciplines that attempt to determine the strength and character of the relationship between one dependent variable (usually denoted by Y) and a series of other variables (known as independent variables). The dependent variables for this study are the financial performance of commercial banks in Ethiopia measured by ROE, ROA, and NIM and the independent variable Chief Executive Officers (CEO) duality. Table 4.4 shows that the Chief Executive Officer in the current study is explained by whether the chief executive officer holds the position of chairperson or not. It is a dummy variable. A score of 1 is given if the chief executive officer holds the position of chairperson, otherwise 0. As presented in Table 4.4, Chief Executive Officer is positively correlated with financial performance as measured by ROE 0.001 and statistically insignificant (p-value= 0.488).\u003c/p\u003e\n\u003cp\u003eChief Executive Officer duality is the independent variable in the present study as measured by whether the chief executive officer of the bank holds the position of the chairperson or not. It is a dummy variable. A score of 1 is given if the chief executive officer holds the position of chairperson, otherwise 0. From the fixed effect regression results (Table 4.5), the chief executive officer duality is negatively and insignificantly regressed with the financial performance of commercial banks as measured by return on assets. The coefficient value of chief executive officer (CEO) duality is -0.002 and its p-value of 0.222.\u003c/p\u003e\n\u003cp\u003eChief Executive Officer (CEO) duality is explained by whether the chief executive officer holds the position of chairperson or not. It is a dummy variable. A score of 1 is given if the chief executive officer holds the position of chairperson, otherwise 0. Based on the random effect regression model in Table 4.6, the coefficient of the chief executive officer is -0.422 and its p-value of 0.018. This shows that there is a negative and significant relationship between Chief Executive Officer Duality and the financial performance as measured by Net Interest Margin (NIM) of the sample commercial banks in Ethiopia at 5 % of the level of significance. The present study implies that holding all independent variables remain constant, as Chief Executive Officer duality increase by one, financial performance as measured by Net Interest Margin (NIM) of the sample commercial banks in Ethiopia is decreased on average by 0.422 percent.\u003c/p\u003e"},{"header":"Conclusions","content":"\u003cp\u003eBased on the analysis the researcher concludes that half of the bank\u0026apos;s chief executive officers hold the position of chairman since the average mean shows 0.508 or 51%. The correlation result indicates that Chief Executive Officer (CEO) duality is 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) \u0026nbsp;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).\u0026nbsp;\u003c/p\u003e\n\u003cp\u003eThis result is supported by the regression result analyzed in Tables 4.4, 4.5 \u0026amp; 4.6.\u003c/p\u003e"},{"header":"Recommendation","content":"\u003cp\u003eThe findings of the study point to on average 51% of chief executive officers hold the position of chairman in the commercial banks in Ethiopia. This leads to a negative relationship between Chief Executive Officers (CEO) Duality and the financial performance of commercial banks in Ethiopia as measured by Return on Assets (ROA) and Net Interest Margin (NIM). From this, the researcher recommends that the position of chief executive officers and the position of chairman should be separate in Commercial banks in Ethiopia.\u003c/p\u003e"},{"header":"Abbreviations","content":"\u003cp\u003eBOD \u0026nbsp; \u0026nbsp; \u0026nbsp;Board of Director\u003c/p\u003e\n\u003cp\u003eCEO \u0026nbsp; \u0026nbsp; \u0026nbsp; Chief Executive Officers\u003c/p\u003e\n\u003cp\u003eNIM \u0026nbsp; \u0026nbsp; \u0026nbsp; Net Interest Margin\u003c/p\u003e\n\u003cp\u003eROA \u0026nbsp; \u0026nbsp; \u0026nbsp; Return On Asset\u003c/p\u003e\n\u003cp\u003eROE \u0026nbsp; \u0026nbsp; \u0026nbsp; Return On equity\u0026nbsp;\u003c/p\u003e\n\u003cp\u003eUNDP \u0026nbsp; \u0026nbsp;United Nations Development program\u003c/p\u003e"},{"header":"Declarations","content":"\u003cp\u003e\u003cstrong\u003eAvailability of data and materials\u0026nbsp;\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eThe source of data and materials for this manuscript are primary and secondary data. The\u0026nbsp;primary data have been gathered from selected commercial banks using survey questionnaires concerning corporate structure while secondary data have been accrued from the National Bank of Ethiopia with banks\u0026apos; financial performance.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eCompeting Interest\u0026nbsp;\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eThe authors declare that they have no known competing for financial interests or personal relationships that could have appeared to influence the work report in this paper.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eFunding\u0026nbsp;\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eThere is no applicable funding information\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eAuthors\u0026rsquo; contributions\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eThe contributions of authors are described in the following manner:\u003c/p\u003e\n\u003cp\u003eConstructing an idea or hypothesis for the manuscript\u0026rsquo;Dr. Addisu\u0026rsquo;Autthor,planning methodology \u0026rsquo;Workinesh\u0026rsquo;Athour, Literatures Review \u0026rsquo;Workinesh\u0026rsquo;Author, Data collection and proccing \u0026rsquo;Workinesh\u0026rsquo;Author, Organizing and Supervising the course of the article \u0026lsquo;Dr.Addisu\u0026rsquo;Author, taking responsibility in the construction of the whole of the article and reviewing the article before submission for spelling and grammar \u0026rsquo;both\u0026rsquo; \u0026nbsp;Authors.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eAcknowledgments\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eI would like to thank Ethiopian Commercial bank workers at each level for their cooperation and assistance by provide us the important data. Without their cooperation, the we would not have been completed this study in time. I would also like to express my sincere appreciation to the clients of the institution who provided us with relevant data and information by scarifying their precious time.\u0026nbsp;\u003c/p\u003e"},{"header":"References","content":"\u003col\u003e\u003cli\u003e\u003cspan\u003eAbor, J., \u0026amp; Biekpe, N. (2005). What determines the capital structure of listed firms in Ghana?\u0026rdquo;. \u003cem\u003eAfrican Finance Journal\u003c/em\u003e, 7(1), 37\u0026ndash;48\u003c/span\u003e\u003c/li\u003e \u003cli\u003e\u003cspan\u003eCallaghan, M. A. (2005). The relationship between chief executive officer duality and subsequent corporate financial performance (Doctoral dissertation, Capella University)\u003c/span\u003e\u003c/li\u003e \u003cli\u003e\u003cspan\u003eDaily, C. M., \u0026amp; Dalton, D. R. (1992). 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Recent developments in corporate governance: An overview. Vol.12, No. 2006, pp.\u0026nbsp;381\u0026ndash;402\u003c/span\u003e\u003c/li\u003e \u003cli\u003e\u003cspan\u003eHambrick, D. C., \u0026amp; Fukutomi, G. D. (1991). The seasons of a CEO's tenure. \u003cem\u003eAcademy of management review\u003c/em\u003e, 16(4), 719\u0026ndash;742\u003c/span\u003e\u003c/li\u003e \u003cli\u003e\u003cspan\u003eJackling, B., \u0026amp; Johl, S. (2009). Board structure and firm performance: Evidence from India's top companies.Corporate Governance: An International Review, Vol.17\u003c/span\u003e\u003c/li\u003e \u003cli\u003e\u003cspan\u003eJensen, M. C., \u0026amp; Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. \u003cem\u003eJournal of financial economics\u003c/em\u003e, 3(4), 305\u0026ndash;360\u003c/span\u003e\u003c/li\u003e \u003cli\u003e\u003cspan\u003eKajola, S. O. (2008). Corporate governance and firm performance: The case of Nigerian listed firms. \u003cem\u003eEuropean journal of economics, finance and administrative sciences\u003c/em\u003e, 14(14), 16\u0026ndash;28\u003c/span\u003e\u003c/li\u003e \u003cli\u003e\u003cspan\u003eKula, V. (2005). The impact of the roles, structure and process of boards on firm performance: Evidence from Turkey. Corporate governance: an international review, Vol.\u0026nbsp;13, No. 2, pp.\u0026nbsp;265\u0026ndash;276\u003c/span\u003e\u003c/li\u003e \u003cli\u003e\u003cspan\u003eKyereboah-Coleman, A. (2007). The impact of capital structure on the performance of microfinance institutions. \u003cem\u003eThe Journal of Risk Finance\u003c/em\u003e, 8(1), 55\u0026ndash;57\u003c/span\u003e\u003c/li\u003e \u003cli\u003e\u003cspan\u003eMallin, C. (2001). \u003cem\u003eInstitutional investors and voting practices\u003c/em\u003e. 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Corporate control and bank efficiency. \u003cem\u003eJournal of Banking \u0026amp; Finance\u003c/em\u003e, 17, 2\u0026ndash;3\u003c/span\u003e\u003c/li\u003e \u003cli\u003e\u003cspan\u003eRechner, P. L., \u0026amp; Dalton, D. R. (1991). CEO duality and organizational performance: A longitudinal analysis. \u003cem\u003eStrategic management journal\u003c/em\u003e, 12(2), 155\u0026ndash;160\u003c/span\u003e\u003c/li\u003e \u003cli\u003e\u003cspan\u003eSingh, V., Vinnicombe, S., \u0026amp; Johnson, P. (2001). Women directors on top UK boards. \u003cem\u003eCorporate Governance: An International Review\u003c/em\u003e, 9(3), 206\u0026ndash;216\u003c/span\u003e\u003c/li\u003e \u003cli\u003e\u003cspan\u003eSahin, K., Basfirinci, C. S., \u0026amp; Ozsalih, A. (2011). The impact of board composition on corporate financial and social responsibility performance: Evidence from public-listed companies in Turkey. \u003cem\u003eAfrican Journal of Business Management\u003c/em\u003e, 5(7), 2959\u0026ndash;2978\u003c/span\u003e\u003c/li\u003e \u003cli\u003e\u003cspan\u003eTerjesen, S., Sealy, R., \u0026amp; Singh, V. (2009). Women directors on corporate boards: A review and research agenda. \u003cem\u003eCorporate governance: an international review\u003c/em\u003e, 17(3), 320\u0026ndash;337\u003c/span\u003e\u003c/li\u003e \u003cli\u003e\u003cspan\u003eTian, J. J., \u0026amp; Lau, C. M. (2001). Board composition, leadership structure, and performance in Chinese shareholding companies. \u003cem\u003eAsia Pacific Journal of Management\u003c/em\u003e, 18(2), 245\u0026ndash;263\u003c/span\u003e\u003c/li\u003e \u003cli\u003e\u003cspan\u003eTomar, S., \u0026amp; Bino, A. (2012). Corporate governance and bank performance: evidence from the Jordanian banking industry. \u003cem\u003eJordan Journal of Business Administration\u003c/em\u003e, 8(2), 353\u0026ndash;372\u003c/span\u003e\u003c/li\u003e \u003cli\u003e\u003cspan\u003eYermack, D. (1996). Higher market valuation of companies with a small board of directors. \u003cem\u003eJournal of financial economics\u003c/em\u003e, 40(2), 185\u0026ndash;211\u003c/span\u003e\u003c/li\u003e\u003c/ol\u003e"},{"header":"Tables","content":"\u003cp\u003eTable 1 is available in the Supplementary Files section.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eTable 2: Summary of Descriptive Statistics for Dependent Variables\u003c/strong\u003e\u003c/p\u003e\n\u003ctable border=\"1\" cellpadding=\"0\" cellspacing=\"0\"\u003e\n \u003ctbody\u003e\n \u003ctr\u003e\n \u003ctd valign=\"bottom\" width=\"15.675675675675675%\"\u003e\n \u003cp\u003eVariable\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"20.36036036036036%\"\u003e\n \u003cp\u003eObservation\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"15.675675675675675%\"\u003e\n \u003cp\u003eMean\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"15.675675675675675%\"\u003e\n \u003cp\u003eMaximum\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"16.936936936936938%\"\u003e\n \u003cp\u003eMinimum\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"15.675675675675675%\"\u003e\n \u003cp\u003eStd. Dev.\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd valign=\"bottom\" width=\"15.675675675675675%\"\u003e\n \u003cp\u003eROA\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"20.36036036036036%\"\u003e\n \u003cp\u003e120\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"15.675675675675675%\"\u003e\n \u003cp\u003e3.086\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"15.675675675675675%\"\u003e\n \u003cp\u003e6.700\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"16.936936936936938%\"\u003e\n \u003cp\u003e0.000\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"15.675675675675675%\"\u003e\n \u003cp\u003e0.973\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd valign=\"bottom\" width=\"15.675675675675675%\"\u003e\n \u003cp\u003eROE\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"20.36036036036036%\"\u003e\n \u003cp\u003e120\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"15.675675675675675%\"\u003e\n \u003cp\u003e24.841\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"15.675675675675675%\"\u003e\n \u003cp\u003e77.710\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"16.936936936936938%\"\u003e\n \u003cp\u003e0.000\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"15.675675675675675%\"\u003e\n \u003cp\u003e12.169\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd valign=\"bottom\" width=\"15.675675675675675%\"\u003e\n \u003cp\u003eNIM\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"20.36036036036036%\"\u003e\n \u003cp\u003e120\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"15.675675675675675%\"\u003e\n \u003cp\u003e5.198\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"15.675675675675675%\"\u003e\n \u003cp\u003e14.000\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"16.936936936936938%\"\u003e\n \u003cp\u003e1.200\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"15.675675675675675%\"\u003e\n \u003cp\u003e2.484\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003c/tbody\u003e\n\u003c/table\u003e\n\u003cp\u003eSource: E-view 9 result\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eTable 3: Summary of Descriptive Statistics for Independent Variables\u003c/strong\u003e\u003c/p\u003e\n\u003cdiv\u003e\n \u003ctable border=\"1\" cellpadding=\"0\" cellspacing=\"0\" width=\"0\"\u003e\n \u003ctbody\u003e\n \u003ctr\u003e\n \u003ctd valign=\"bottom\" width=\"19.45945945945946%\"\u003e\n \u003cp\u003eIndependent Variable\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"16.576576576576578%\"\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003cp\u003eObservation\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"10.63063063063063%\"\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003cp\u003eMean\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"15.135135135135135%\"\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003cp\u003eMaximum\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"15.135135135135135%\"\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003cp\u003eMinimum\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"23.063063063063062%\"\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003cp\u003eStd. Deviation\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd valign=\"bottom\" width=\"19.45945945945946%\"\u003e\n \u003cp\u003eCEO\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"16.576576576576578%\"\u003e\n \u003cp\u003e120\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"10.63063063063063%\"\u003e\n \u003cp\u003e0.508\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"15.135135135135135%\"\u003e\n \u003cp\u003e1.000\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"15.135135135135135%\"\u003e\n \u003cp\u003e0.000\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"23.063063063063062%\"\u003e\n \u003cp\u003e0.502\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003c/tbody\u003e\n \u003c/table\u003e\n\u003c/div\u003e\n\u003cp\u003eSource: E-view 9 results.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eTable 4: Correlation analysis of ROE, ROA, and NIM with Chief Executive Officers\u003c/strong\u003e\u003cstrong\u003e\u0026nbsp;(CEO) duality\u003c/strong\u003e\u003c/p\u003e\n\u003ctable border=\"1\" cellpadding=\"0\" cellspacing=\"0\"\u003e\n \u003ctbody\u003e\n \u003ctr\u003e\n \u003ctd valign=\"bottom\" width=\"29.19020715630885%\"\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"19.2090395480226%\"\u003e\n \u003cp\u003eROE\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"14.689265536723164%\"\u003e\n \u003cp\u003eROA\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"18.07909604519774%\"\u003e\n \u003cp\u003eNIM\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"18.832391713747647%\"\u003e\n \u003cp\u003eCEO\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd valign=\"bottom\" width=\"29.19020715630885%\"\u003e\n \u003cp\u003eROE\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"19.2090395480226%\"\u003e\n \u003cp\u003e1.000\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"14.689265536723164%\"\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"18.07909604519774%\"\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"18.832391713747647%\"\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd valign=\"bottom\" width=\"29.19020715630885%\"\u003e\n \u003cp\u003eROA\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"19.2090395480226%\"\u003e\n \u003cp\u003e0.123\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"14.689265536723164%\"\u003e\n \u003cp\u003e1.000\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"18.07909604519774%\"\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"18.832391713747647%\"\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd valign=\"bottom\" width=\"29.19020715630885%\"\u003e\n \u003cp\u003eNIM\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"19.2090395480226%\"\u003e\n \u003cp\u003e0.05\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"14.689265536723164%\"\u003e\n \u003cp\u003e0.712\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"18.07909604519774%\"\u003e\n \u003cp\u003e1.000\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"18.832391713747647%\"\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd valign=\"bottom\" width=\"29.19020715630885%\"\u003e\n \u003cp\u003eCEO\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"19.2090395480226%\"\u003e\n \u003cp\u003e0.013\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"14.689265536723164%\"\u003e\n \u003cp\u003e-0.231\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"18.07909604519774%\"\u003e\n \u003cp\u003e-0.043\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"18.832391713747647%\"\u003e\n \u003cp\u003e1.000\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003c/tbody\u003e\n\u003c/table\u003e\n\u003cp\u003eSource: E-view 9 results.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eTable 5: Regression results using ROE as a proxy of financial performance\u003c/strong\u003e\u003c/p\u003e\n\u003ctable border=\"1\" cellpadding=\"0\" cellspacing=\"0\" width=\"0\"\u003e\n \u003ctbody\u003e\n \u003ctr\u003e\n \u003ctd colspan=\"2\" rowspan=\"2\" valign=\"bottom\" width=\"41.804788213627994%\"\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003cp\u003eIndependent Variable\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd colspan=\"5\" valign=\"bottom\" width=\"58.195211786372006%\"\u003e\n \u003cp\u003eDependent Variables Bank Financial Performance\u0026nbsp;(ROE)\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd colspan=\"3\" valign=\"bottom\" width=\"52.53164556962025%\"\u003e\n \u003cp\u003eCoefficient\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"30.379746835443036%\"\u003e\n \u003cp\u003eStd. Error\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"17.088607594936708%\"\u003e\n \u003cp\u003eP-Value\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd colspan=\"2\" valign=\"bottom\" width=\"41.804788213627994%\"\u003e\n \u003cp\u003eConstant\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd colspan=\"3\" valign=\"bottom\" width=\"30.570902394106813%\"\u003e\n \u003cp\u003e0.129**\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"17.679558011049725%\"\u003e\n \u003cp\u003e0.042\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"9.94475138121547%\"\u003e\n \u003cp\u003e0.003\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd colspan=\"2\" valign=\"bottom\" width=\"41.804788213627994%\"\u003e\n \u003cp\u003eChief Executive Officer Duality\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd colspan=\"3\" valign=\"bottom\" width=\"30.570902394106813%\"\u003e\n \u003cp\u003e\u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp;0.001\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"17.679558011049725%\"\u003e\n \u003cp\u003e0.001\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"9.94475138121547%\"\u003e\n \u003cp\u003e0.488\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd valign=\"bottom\" width=\"35.47794117647059%\"\u003e\n \u003cp\u003eR-Square\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd colspan=\"2\" valign=\"bottom\" width=\"13.786764705882353%\"\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"13.235294117647058%\"\u003e\n \u003cp\u003e\u0026nbsp;0.525\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd colspan=\"2\" valign=\"bottom\" width=\"27.573529411764707%\"\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"9.926470588235293%\"\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd valign=\"bottom\" width=\"35.47794117647059%\"\u003e\n \u003cp\u003eAdjusted R square\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd colspan=\"2\" valign=\"bottom\" width=\"13.786764705882353%\"\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"13.235294117647058%\"\u003e\n \u003cp\u003e\u0026nbsp;0.428\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd colspan=\"2\" valign=\"bottom\" width=\"27.573529411764707%\"\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"9.926470588235293%\"\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd valign=\"bottom\" width=\"35.47794117647059%\"\u003e\n \u003cp\u003eStandard error of the regression\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd colspan=\"2\" valign=\"bottom\" width=\"13.786764705882353%\"\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"13.235294117647058%\"\u003e\n \u003cp\u003e\u0026nbsp;0.007\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd colspan=\"2\" valign=\"bottom\" width=\"27.573529411764707%\"\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"9.926470588235293%\"\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd valign=\"bottom\" width=\"35.47794117647059%\"\u003e\n \u003cp\u003eF-Statistic\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd colspan=\"2\" valign=\"bottom\" width=\"13.786764705882353%\"\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"13.235294117647058%\"\u003e\n \u003cp\u003e\u0026nbsp;5.419\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd colspan=\"2\" valign=\"bottom\" width=\"27.573529411764707%\"\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"9.926470588235293%\"\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd valign=\"bottom\" width=\"35.47794117647059%\"\u003e\n \u003cp\u003eProb. (F-Statistic)\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd colspan=\"2\" valign=\"bottom\" width=\"13.786764705882353%\"\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"13.235294117647058%\"\u003e\n \u003cp\u003e0.000\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd colspan=\"2\" valign=\"bottom\" width=\"27.573529411764707%\"\u003e\n \u003cp\u003eDurbin-Watson stat\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"9.926470588235293%\"\u003e\n \u003cp\u003e1.615\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003c/tbody\u003e\n\u003c/table\u003e\n\u003cp\u003eSource: E-view 9 result\u0026nbsp;\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eTable 6: \u0026nbsp;Regression results using ROA as a proxy of financial performance\u003c/strong\u003e\u003c/p\u003e\n\u003cdiv\u003e\n \u003ctable border=\"1\" cellpadding=\"0\" cellspacing=\"0\" width=\"0\"\u003e\n \u003ctbody\u003e\n \u003ctr\u003e\n \u003ctd rowspan=\"2\" valign=\"bottom\" width=\"41.72794117647059%\"\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003cp\u003eIndependent Variable\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd colspan=\"4\" valign=\"bottom\" width=\"58.27205882352941%\"\u003e\n \u003cp\u003eDependent Variable Bank Financial Performance\u0026nbsp;(ROA)\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd valign=\"bottom\" width=\"42.90220820189275%\"\u003e\n \u003cp\u003eCoefficient\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd colspan=\"2\" valign=\"bottom\" width=\"37.53943217665615%\"\u003e\n \u003cp\u003eStd. Error\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"19.558359621451103%\"\u003e\n \u003cp\u003eP-Value\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd valign=\"bottom\" width=\"41.72794117647059%\"\u003e\n \u003cp\u003eConstant\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"25%\"\u003e\n \u003cp\u003e0.339\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd colspan=\"2\" valign=\"bottom\" width=\"21.875%\"\u003e\n \u003cp\u003e0.228\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"11.397058823529411%\"\u003e\n \u003cp\u003e0.541\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd valign=\"bottom\" width=\"41.72794117647059%\"\u003e\n \u003cp\u003eChief Executive Officer Duality\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"25%\"\u003e\n \u003cp\u003e-0.002\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd colspan=\"2\" valign=\"bottom\" width=\"21.875%\"\u003e\n \u003cp\u003e0.002\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"11.397058823529411%\"\u003e\n \u003cp\u003e0.222\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd valign=\"bottom\" width=\"41.72794117647059%\"\u003e\n \u003cp\u003eR-Square\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd colspan=\"2\" valign=\"bottom\" width=\"37.31617647058823%\"\u003e\n \u003cp\u003e\u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp;0.665\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd colspan=\"2\" valign=\"bottom\" width=\"20.955882352941178%\"\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd valign=\"bottom\" width=\"41.72794117647059%\"\u003e\n \u003cp\u003eAdjusted R square\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd colspan=\"2\" valign=\"bottom\" width=\"37.31617647058823%\"\u003e\n \u003cp\u003e\u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; 0. 597\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd colspan=\"2\" valign=\"bottom\" width=\"20.955882352941178%\"\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd valign=\"bottom\" width=\"41.72794117647059%\"\u003e\n \u003cp\u003eStandard error of the regression\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd colspan=\"2\" valign=\"bottom\" width=\"37.31617647058823%\"\u003e\n \u003cp\u003e\u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; 0.017\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd colspan=\"2\" valign=\"bottom\" width=\"20.955882352941178%\"\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd valign=\"bottom\" width=\"41.72794117647059%\"\u003e\n \u003cp\u003eF-Statistic\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd colspan=\"2\" valign=\"bottom\" width=\"37.31617647058823%\"\u003e\n \u003cp\u003e\u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; 9.737\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd colspan=\"2\" valign=\"bottom\" width=\"20.955882352941178%\"\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd valign=\"bottom\" width=\"41.72794117647059%\"\u003e\n \u003cp\u003eProb.(F-Statistic) \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; 0.000 \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp;\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd colspan=\"2\" valign=\"bottom\" width=\"37.31617647058823%\"\u003e\n \u003cp\u003e\u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; \u0026nbsp; Durbin-Watson stat\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd colspan=\"2\" valign=\"bottom\" width=\"20.955882352941178%\"\u003e\n \u003cp\u003e\u0026nbsp; \u0026nbsp; \u0026nbsp;1.254\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003c/tbody\u003e\n \u003c/table\u003e\n\u003c/div\u003e\n\u003cp\u003eSource: E-view 9 result\u0026nbsp;\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eTable 7: Regression results using NIM as a proxy of financial performance.\u003c/strong\u003e\u003c/p\u003e\n\u003ctable border=\"1\" cellpadding=\"0\" cellspacing=\"0\" width=\"0\"\u003e\n \u003ctbody\u003e\n \u003ctr\u003e\n \u003ctd colspan=\"2\" rowspan=\"2\" valign=\"bottom\" width=\"41.06813996316759%\"\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003cp\u003eIndependent Variable\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd colspan=\"5\" valign=\"bottom\" width=\"58.93186003683241%\"\u003e\n \u003cp\u003eDependent Variable Bank Financial Performance\u003c/p\u003e\n \u003cp\u003e(NIM)\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd colspan=\"3\" valign=\"bottom\" width=\"36.5625%\"\u003e\n \u003cp\u003eCoefficient\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"36.5625%\"\u003e\n \u003cp\u003eStd. Error\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"26.875%\"\u003e\n \u003cp\u003eP-Value\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd colspan=\"2\" valign=\"bottom\" width=\"41.06813996316759%\"\u003e\n \u003cp\u003eConstant\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd colspan=\"3\" valign=\"bottom\" width=\"21.54696132596685%\"\u003e\n \u003cp\u003e-54.190*\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"21.54696132596685%\"\u003e\n \u003cp\u003e12.982\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"15.83793738489871%\"\u003e\n \u003cp\u003e0.001\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd colspan=\"2\" valign=\"bottom\" width=\"41.06813996316759%\"\u003e\n \u003cp\u003eChief Executive Officer Duality\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd colspan=\"3\" valign=\"bottom\" width=\"21.54696132596685%\"\u003e\n \u003cp\u003e-0.422**\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"21.54696132596685%\"\u003e\n \u003cp\u003e0.175\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"15.83793738489871%\"\u003e\n \u003cp\u003e0.018\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd valign=\"bottom\" width=\"35.54327808471455%\"\u003e\n \u003cp\u003eR-Square\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd colspan=\"2\" valign=\"bottom\" width=\"9.023941068139964%\"\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"9.208103130755065%\"\u003e\n \u003cp\u003e0.510\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd colspan=\"2\" valign=\"bottom\" width=\"30.386740331491712%\"\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"15.83793738489871%\"\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd valign=\"bottom\" width=\"35.54327808471455%\"\u003e\n \u003cp\u003eAdjusted R square\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd colspan=\"2\" valign=\"bottom\" width=\"9.023941068139964%\"\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"9.208103130755065%\"\u003e\n \u003cp\u003e0. 476\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd colspan=\"2\" valign=\"bottom\" width=\"30.386740331491712%\"\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"15.83793738489871%\"\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd valign=\"bottom\" width=\"35.54327808471455%\"\u003e\n \u003cp\u003eStandard error of the regression\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd colspan=\"2\" valign=\"bottom\" width=\"9.023941068139964%\"\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"9.208103130755065%\"\u003e\n \u003cp\u003e0.958\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd colspan=\"2\" valign=\"bottom\" width=\"30.386740331491712%\"\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"15.83793738489871%\"\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd valign=\"bottom\" width=\"35.54327808471455%\"\u003e\n \u003cp\u003eF-Statistic\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd colspan=\"2\" valign=\"bottom\" width=\"9.023941068139964%\"\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"9.208103130755065%\"\u003e\n \u003cp\u003e7.364\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd colspan=\"2\" valign=\"bottom\" width=\"30.386740331491712%\"\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"15.83793738489871%\"\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd valign=\"bottom\" width=\"35.54327808471455%\"\u003e\n \u003cp\u003eProb.(F-Statistic)\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd colspan=\"2\" valign=\"bottom\" width=\"9.023941068139964%\"\u003e\n \u003cp\u003e0.000\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"9.208103130755065%\"\u003e\n \u003cp\u003e\u0026nbsp;\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd colspan=\"2\" valign=\"bottom\" width=\"30.386740331491712%\"\u003e\n \u003cp\u003eDurbin-Watson stat\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd valign=\"bottom\" width=\"15.83793738489871%\"\u003e\n \u003cp\u003e1.409\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003c/tbody\u003e\n\u003c/table\u003e\n\u003cp\u003eSource: E-view 9 result\u0026nbsp;\u003c/p\u003e"}],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":true,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":false,"hideJournal":true,"highlight":"","institution":"","isAcceptedByJournal":false,"isAuthorSuppliedPdf":false,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":false,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true},"keywords":" 1.Chief Executive officer (CEO), 2.Financial Performance, 3.Corporate Governance","lastPublishedDoi":"10.21203/rs.3.rs-1521426/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-1521426/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"\u003cp\u003eThe 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).\u003c/p\u003e","manuscriptTitle":"Impact of Chief Executive Officers (CEO) Duality on Financial Performance of Commercial Banks in Ethiopia","msid":"","msnumber":"","nonDraftVersions":[{"code":1,"date":"2022-04-20 16:25:12","doi":"10.21203/rs.3.rs-1521426/v1","editorialEvents":[{"type":"communityComments","content":0}],"status":"published","journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true}}],"origin":"","ownerIdentity":"4c78efce-1cad-4767-bcb3-2be974a255d7","owner":[],"postedDate":"April 20th, 2022","published":true,"recentEditorialEvents":[],"rejectedJournal":[],"revision":"","amendment":"","status":"posted","subjectAreas":[],"tags":[],"updatedAt":"2023-01-20T12:24:02+00:00","versionOfRecord":[],"versionCreatedAt":"2022-04-20 16:25:12","video":"","vorDoi":"","vorDoiUrl":"","workflowStages":[]},"version":"v1","identity":"rs-1521426","journalConfig":"researchsquare"},"__N_SSP":true},"page":"/article/[identity]/[[...version]]","query":{"redirect":"/article/rs-1521426","identity":"rs-1521426","version":["v1"]},"buildId":"WrCJVZZCHTDjtuVLN7oU0","isFallback":false,"isExperimentalCompile":false,"dynamicIds":[84888],"gssp":true,"scriptLoader":[]}