The impact of the application of governance mechanisms on the financial performance of Takaful insurance companies

Abstract

This study aims at considering the relation between companies’ governance and the financial performance of solidarity insurance companies. To meet this objective, financial data of the top 10 companies working in the Saudi insurance sector and registered in the financial papers of 2010 to 2017 are analyzed. The findings show a statistical influence between governance indicators which are the ownership independence and board of directors construction, managers duality along with the bulk of legislative censorship body, besides the financial performance of companies which is embodied in the revenue of ownership right (ROE). However, it has no role on revenue of assets (ROA), profit margin (PM) and the average of revenue on normal share (EPS).