Challenges to corporate governance practices: Case study of Libyan commercial banks

Abstract

The purpose of this study is to investigate corporate governance (CG) practices in Libyan Commercial Banks (LCBs) in order to find out any essential challenges that are associated with the process of adopting CG in the LCBs which became mandatory implementation in late 2010 in Libya. This study adopts a qualitative approach by conducting semi-structured interviews to collect the required data within the framework of stakeholder and new institutional theories of CG. Five LCBs are selected as units of case studies, as well as Central Bank of Libya (CBL). The results of the findings reveal that the implementation of CG code 2010 at LCBs is still in the early stages. The weakness of supervision and absence of training, as well as a lack of knowledge and political instability; are the main challenges to LCBs in complying with good CG practices and overcoming the problems of the political economics of CG. The outcome of this study will contribute to research knowledge on CG, especially in Libyan banks, by using stakeholder and new institutional theories as a theoretical framework.