Abstract

This PhD Thesis critically explores and evaluates the relationship between corporate governance and profitability of Commercial Banks in Libya within Libya’s post-conflict and politically unstable financial environment. Despite global emphasis on sound corporate governance policies and practices, Libya's commercial banking sector continues to struggle with weak corporate governance mechanism e.g., board structures, state-dominated ownership, and ineffective risk management systems, which hinder corporate financial performance. Drawing upon Agency, Stewardship, Shareholder, Resource Dependency, Stakeholder, and Institutional theories, the Thesis develops a contextualized conceptual framework tailored for examining the key research question: "How does corporate governance impact the profitability of banks in Libya, and what governance reforms are needed to enhance financial performance in the Libyan banking sector?". This question is answered by adopting a mixed research methodology, underpinned by a pragmatist philosophy, and a sequential mix of quantitative data from exploratory questionnaire survey (N = 343 respondents) and qualitative data from evaluative semi-structured interviews of 20 participants (5 Board Directors, 11 Senior Bank Managers including academics, 4 Experts).
The quantitative analysis using SPSS statistics tested six hypotheses (H1, H2, H3, H4, H5, and H6) involving corporate governance (as independent variable) and corporate profitability (as dependent variable). The NVivo thematic content analysis of the qualitative insights from the 20 interviewees critically evaluated the exploratory quantitative findings, leading to significant findings in six thematic areas: 1/inadequate board independence, 2/excessive government or political interference, 3/poor or weak regulatory compliance, 4/low corporate profitability and financial instability, 5/governance structures in Libyan banks often exist in form but lack functional impact, undermining strategic decision-making and operational efficiency, and 6/institutional constraints such as legal ambiguities, lack of enforcement mechanisms, and sociopolitical volatility exacerbate governance failures.
These findings contribute significantly to knowledge in two ways. First, strategically, sustainable corporate profitability in Libya’s commercial banking sector is contingent on comprehensive, multi-level corporate governance reform, anchored in contextual realities and long-term institutional capacity-building. The strategic implication is that Libyan commercial banks need to focus on issues including, separating executive and non-executive roles, equality, diversity, and inclusion, operational efficiency, and cost control. Second, from the perspective of theory development, the Libyan context, helps researchers to challenge and refine existing corporate government theory and practice, strengthen methodological robustness, and provide deeper understanding of governance-performance linkages in fragile and transitional economies. While the Thesis findings contribute valuable insights, the major limitation is that it is limited by the difficulty of accessing empirical data in Libya’s fragmented political and socioeconomic environment, coupled with limited generalisability of the findings. To advance this field, future research at the postdoctoral level would adopt a comparative study approach involving a larger sample size and a wider group of stakeholders across the Middle East and North African region; to better understand how corporate governance reforms evolve over time and interact with sociocultural and institutional forces.