Characteristics of Audit Committees and Banking Sector Performance in GCC

The purpose of this study is to investigate the association between banks’ performance in Gulf Cooperation Council GCC banking sector and audit committees’ characteristics in banks. The current study contributes to the literature of characteristics of audit committee by filling the literature’ gaps in GCC region. As per (Oroud Int. J. Econ. Finance, 11(4), 104–113 [41]), the perfect composition of audit committees will help all firms in applying a good corporate governance (CG), in turn it will give indication for proper integrity, quality, credibility, and objectivity. For the purpose of this study, we selected number of independent variables; existence of non-executive members, committee size, existence of female members, number of meetings, existence of qualified members. Regarding bank performance, it is represented by returns on assets and equities (ROA), (ROE) respectively. Sixty eight banks in GCC have been selected during the period from 2013 to 2017, and the 68 banks divided into Islamic banks and conventional banks for further analysis. We used the Quantile analysis and nonparametric regression (OLS) to test the above mentioned association. We concludes that the characteristics of committee members are very important in developing and enhancing banks’ performance. This study provides evidence that the association between committee size and returns is positively and significantly correlated. Furthermore, it concludes that the presence of women members, independent members, committees’ meetings, and existence of qualified members are not significantly affecting the performance.