The role of the Board of Directors in improving financial performance in the proper application of the principles of corporate governance Case study of Alliance Insurance Company

Abstract

The investors have always searched for companies with a sound structure in order to perform the corporate governance which strongly concentrated on the effectiveness of the administration board. This study aims to show the administration board’s role in the proper application to the corporate governance principles. As well as, the extent of its contribution in the realm of the financial improvement which mainly focused on Alliance company for insurance. It has been relying to evaluate the effectiveness of the administration board concerning the Alliance Company for insurance on the guidelines that have been issued by the Organization for Economic Cooperation and Development and a Charter of the good governance of the institution in Algeria, beside of the different lists of corporate governance that is related to administration board. Moreover, it has been judged concerning the financial performance of the company on the calculation and analysis of the following performance indicators; the Return on Asset, Return on Equity, Earnings par share from 2011 when the companies joined the bourse

This study resulted up several findings; one of the most important is that the administration board of Alliance insurance company contains a lot of the administration board efficiency requirements either on the independency level or the competence of its members, in addition to three subjuries under the board to support it in its different functions. Also, the role and the management of the Chairman which reflected a good picture on the financial performance.

It also recommended on the necessity of creating a heuristic rule for the function of the administration board and its juries along with the companies necessity to declare how far these rules are applied and deployed in the annual reports, as well as providing means to empowerment people concerned to check it.