Abstract:

Corporate governance, which is a key factor in improving economic efficiency, ensuring sustainable growth and especially in gaining investor confidence, is vital for the banking sector. In recent years, banks have sought to adapt to more reliable and generally accepted corporate governance regulations because the confidence factor come to the front in the banks resulting from their structure and functioning. The number and transaction volumes of participation banks are increasing in our country as in the rest of the world. Participation banks, which have to compete with both Islamic financial institutions and traditional banks, are rapidly adapting to effective corporate governance practices. Despite the extra cost and workload, it is expected that the effective management mechanism, which is established as a result of good corporate governance practices, should make a positive contribution to the performance of the participation banks. In this framework, this empirical study on participation banks operating in Turkey has been conducted by means of regression analysis to determine whether there is a meaningful relationship between corporate governance structures and financial performances of banks in. The size of the board, number of the independent managers, managerial ownership, size and age of the company, and the public offerrng ratio were used as corporate governance variables and return on equity (ROE) and return on assets (ROA) were used as financial performance indicators in our study. After the analysis, it is concluded that the corporate governance variables have a significant influence in explaining the financial performance. The findings of our research are similar to those in the literature. Althoug some corporate governance elements were not related to financial performance, overall a relationship has been found.

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