Libya: Politics, Economics, Banking, and their Effects on Corporate Governance

Öz

This study examines the concept of corporate governance in Libya from a political, economic, banking perspective, where it relies upon a review and analysis of the literature. As such, the study explores how to develop corporate governance in Libya and it presents an overview of the development of Libya’s accounting and auditing profession and the measures taken to improve the Libyan banking sector, concentrating on the major role of the Code of Corporate Governance (2010) issued by the Central Bank of Libya. The study concludes that the concept of governance in Libya is still in the early stages of development, and it is inhibited by the weaknesses in board governance, government intervention, and the weak legal and regulatory environment. CG practice in Libya is thus operating within an environment that is very different from that in developed countries. It is crucial, therefore, for developing countries to have their own corporate governance frameworks that consider political, economic cultural and social factors found in each country.

Anahtar Kelimeler

• Corporate Governance
• Central Bank of Libya
• Libyan Banking Sector
• Developing Countries
• Libya

Kaynakça

1. Abdo, H., & Wakkas, F. (2011). Islamic finance: understanding the risk management of the Islamic bonds, Sukuk. Lambert Academic Publishing.
2. Abdou, M. A. (2015). Towards a new solution of minority shareholder protection in Libya: letting the minority shareholders have a voice (Doctoral dissertation, University of Glasgow).
3. Abdulsaleh, A.M., (2017). The Introduction of Islamic Finance in Libya: Capturing the Opportunities for SMEs Development. Journal of Emerging Economies and Islamic Research, 5 (1), 39-48.
4. Ahmida, A. A. (1994). The making of modern Libya: State formation, colonization, and resistance, 1830-1932 SUNY Press.
5. Ali, I., & Harvie, C. (2013). Oil and economic development: Libya in the post-gaddafi era. Economic Modelling, 32, 273-285.
6. Aljbiri, A. (2013). The performance of Libyan stock market. Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, 60 (7), 27-38.
7. Almomania, T. M., Ayedhb, A. M., & Abdallah, M. (2017). The impact of board of directors’ characteristics on the earnings quality: Evidence manufacturing firms in Amman stock exchange. Proceeding of Icarbss 2017 Langkawi, Malaysia, 1 (29th), 282-288.
8. Al‐Okaily, J., BenYoussef, N. and Chahine, S., (2020). Economic bonding, corporate governance and earnings management: Evidence from UK publicly traded family firms. International Journal of Auditing, 24 (2),185-204.

9. Alrshah, A. M. (2015). An empirical analysis of audited financial statements reliability: Mediating role of auditor quality. International Journal of Finance and Accounting, 4(3), 172-179.
10. Alrshah, A. M., & Fadzil, F. (2013). The impact of Corporate Governance reforms on External Auditor Quality and Reliability of Audited Financial Statements: Evidence from Libya. In International Conference on Business Innovation, Entrepreneurship and Engineering (ICOBIEE2013), Penang, Malaysia, 6th to 8th December 2013, 1-10.
11. Amaral, I., (2014). Libya. In: Libya. Encyclopedia of Social Media and Politics. Thousand Oaks: SAGE Publications, Inc., 2014, 768-772.
12. Ansari, S. (2012). Indian capital market review: Issues, dimensions and performance analysis. UTMS Journal of Economics, 3 (2), 181-191.
13. Baej, Y., Worthington, A. and Worthington, A., (2014). Prospects, Barriers and Impediments to Islamic Banking in Libya. In: Prospects, Barriers and Impediments to Islamic Banking in Libya. Contemporary Issues in Islamic Finance: Principles, Progress and Prospects. New York USA: Nova Science Publishers, 2014, 109-116.
14. Barghathi, Y., Collison, D., & Crawford, L. (2017). Earnings management in Libyan commercial banks: perceptions of stakeholders. International Journal of Accounting, Auditing and Performance Evaluation, 13 (2), 123-149.
15. Boubakri, N., Cosset, J., & Guedhami, O. (2005). Liberalization, corporate governance and the performance of privatized firms in developing countries. Journal of Corporate Finance, 11 (5), 767-790.
16. Brennan, N. M., Solomon, J., Brennan, N. M., & Solomon, J. (2008). Corporate governance, accountability and mechanisms of accountability: An overview. Accounting, Auditing & Accountability Journal, 21 (7), 885-906.
17. Buferna, F. M., Bangassa, K., & Hodgkinson, L. (2005). Determinants of capital structure: evidence from Libya (Vol. 8). University of Liverpool.
18. Cadbury, A., (1992). Report of the committee on the financial aspects of corporate governance. London: Gee. Available at: http://www.ecgi.org/codes/documents/cadbury.pdf, [Accessed 19th March 2021].
19. Central Bank of Libya (CBL) (2010a). Code of Corporate Governance for Libyan Banks. Tripoli, Libya.
20. Central Bank of Libya (CBL) (2010b). Executive Position for Monetary and Banking Policy - During the Period 2002– 2010. Tripoli, Libya.
21. Central Bank of Libya (CBL). (2008). The 52th Report of the Central Bank of Libya, Tripoli, Libya.
22. Cohen, J., Krishnamoorthy, G., & Wright, A. M. (2002). Corporate governance and the audit process. Contemporary Accounting Research, 19(4), 573-594.
23. Edweib, A. K. S., Shafii, Z., & Ahmad, N. (2013). Stock market and economic growth in Libya. IOSR Journal of Economics and Finance, 2(1), 43-51.
24. El. Hamoudi, M K T. (2017). The role of foreign investment in economic and social development in Libya. International Journal of Scientific & Technology Research - ISSN 2277-8616, 6 (02), 139-149.
25. Eldlimi, M. A., Aziz, M. R. A., & Ibrahim, M. F. (2013). Implementing management information system in Libyan Islamic financial institutions. In The 5th Islamic Economic System Conference (IECONS 2013), at Berjaya Times Square, Kuala Lumpur.
26. El-Firjani, E., Menacere, K., & Pegum, R. (2014). Developing corporate accounting regulation in Libya past and future challenges. Journal of Accounting in Emerging Economies, 4 (1), 22-56.
27. El-Halaby, S. and Hussainey, K., (2015). The determinants of social accountability disclosure: evidence from Islamic banks around the world. International Journal of Business, 20 (3), 202-223.
28. Elkrghli, S. and Yahya, A., (2018). Bankers’ Views Towards Islamic Banking and Islamic Marketing: The Case of Libyan Main Wahda Bank in Benghazi City. Management Studies, 6 (1), 37-55.
29. Elshahoubi, I.S., (2019). An investigation into corporate governance (CG) and accountability practices: evidence from Libyan listed companies (Doctoral dissertation, University of Reading).
30. Etelawi, A. M., Blatner, K. A., & McCluskey, J. (2017). Crude oil and the Libyan economy. International Journal of Economics and Finance, 9 (4), 95-104.
31. Falola, T., Morgan, J., & Oyeniyi, B. A. (2012). Culture and customs of Libya. Abc-clio.
32. Fichtner, J. R. (2010). The recent international growth of mandatory audit committee requirements. International Journal of Disclosure and Governance, 7 (3), 227-243.
33. FRC. (2003). The combined code on corporate governance. London: Financial Reporting Council.
34. Gillan, S. L., & Starks, L. T. (2000). Corporate governance proposals and shareholder activism: The role of institutional investors. Journal of Financial Economics, 57 (2), 275-305.
35. Goodwin, J., & Seow, J. L. (2002). The influence of corporate governance mechanisms on the quality of financial reporting and auditing: Perceptions of auditors and directors in Singapore. Accounting & Finance, 42 (3), 195-223.
36. Grais, W., & Pellegrini, M. (2006). Corporate governance in institutions offering Islamic financial services World Bank.
37. Gurol, B. and Lagasio, V., (2021). Corporate governance and market performance of European banks: analysing differences and similarities between one-tier and two-tier models. International Journal of Business Governance and Ethics, 15 (1), 21-37.
38. Hart, B. L. (2015). A history of the second world war. Chineham, Basingstoke, UK: Macmillan Publishers Ltd.
39. Hawashe, A. A. (2016). Commercial banks’ attributes and annual voluntary disclosure: The case of Libya. International Journal of Accounting and Financial Reporting, 5 (2), 208-233.
40. Huse, M. (2007). Boards, governance and value creation: The human side of corporate governance Cambridge University Press.
41. Ishmela, M. R. (2010). Users' perceptions of annual financial reports in the Libyan environment (Doctoral dissertation, Liverpool John Moores University).
42. Iswaissi, H. and Falahati, K., (2017). Challenges to Corporate Governance Practices: Case Study of Libyan Commercial Banks. Corporate Governance and Sustainability Review, 1 (1), 33-42.
43. Javaid, O. and ul Hassan, M., 2013. A comparison of Islamic and capitalist conception of economic justice. International Journal of Economics, Management and Accounting, 21 (1), 1-30.
44. Khan, M., & Mezran, K. (2013). The Libyan economy after the revolution: still no clear vision. Atlantic Council, Rafik Hariri Center for the Middle East.
45. Laga, M. (2013). Obstacles of adoption and implementation of IFRS in Libya. Research Journal of Economics, Business and ICT, 8 (1).
46. Larbsh, M. M. (2010). An evaluation of corporate governance practice in Libya: stakeholders’ perspectives (Doctoral dissertation, Nottingham Trent University).
47. Magrus, A. A. A. (2012). Corporate Governance Practices in Developing Countries: The Case of Libya.
48. Mangena, M., & Chamisa, E. (2008). Corporate governance and incidences of listing suspension by the JSE securities exchange of south Africa: An empirical analysis. The International Journal of Accounting, 43 (1), 28-44.
49. Martin, M. (2011). Underestimated influences: North Africa in classical antiquity.
50. Masiukiewicz, P. (2014). Multicultural issues in the development of Islamic banking. Journal of Intercultural Management, 6 (3), 167-176.
51. Masli, A.M., (2018). The Role of the Audit Committee as a Corporate Governance Mechanism: The Case of the Banking Sector in Libya. Ph.D. thesis., Nottingham Trent University.
52. Masli, A.M., Mangena, M. and Harradine, D., (2019). The Role of Audit Committees in the Libyan Banking Sector as it Transforms into an Islamic System. International Journal of Islamic Economics and Finance Studies, 5 (2), 1-22.
53. Masoud, N. (2014). What the Libyan economy can learn from emerging countries. Paper Presentations of the 2010 University of Huddersfield Annual Learning and Teaching Conference,
54. Masoud, N. (2016). The development of accounting regulation in the Libyan region countries in Africa. Development, 7 (12)
55. Masoud, N., (2017). An empirical study of audit expectation-performance gap: The case of Libya. Research in International Business and Finance, 41 (October), 1-15.
56. Misa, N. M., & Nia, H. M. (2016). The role of communications globalization in revolutions of the middle east. International Journal of Humanities and Cultural Studies (IJHCS) ISSN 2356-5926, 1 (1), 1809-1831.
57. Mohamed, A. (2013). The effects of political culture of fear on student perceptions of leadership in student-faculty relationships.
58. Mulili, B.M. and Wong, P., (2011). Corporate governance practices in developing countries: The case for Kenya. International journal of business administration, 2 (1), p.14.
59. Muniandy, B., & Hillier, J. (2015). Board independence, investment opportunity set and performance of South African firms. Pacific-Basin Finance Journal, 35, 108-124.
60. Niakooee, S. A. (2013). Contemporary Arab uprisings: Different processes and outcomes. Japanese Journal of Political Science, 14 (3), 421-445.
61. Niblock, T. (2002). " Pariah states" & sanctions in the middle east: Iraq, Libya, Sudan Lynne Rienner Publishers.
62. O'Sullivan, M. L. (2004). Shrewd sanctions: Statecraft and state sponsors of terrorism Brookings Institution Press.
63. Oyelami, B. O., & Ale, S. O. (2013). Application of E^ p-stability to impulsive financial model. International Journal of Analysis and Applications, 2 (1), 38-53.
64. Pemberton, B.C. and Ng, W., (2021). Corporate governance paradigms of hazardous industries: Enduring challenges of Britain’s civil nuclear industry. Journal of General Management, 46(2), 156-167.
65. Pratten, J. D., & Mashat, A. A. (2009). Corporate social disclosure in Libya. Social Responsibility Journal, 5 (3), 311-327.
66. Rahim, N. A. (2016:). Roman coloured glass objects excavated from Tripoli, Libya: A chemico-physical characterization study. Middle East Journal of Applied, 06 (03), 594-605.
67. Raza, S. (2012). Italian colonisation & Libyan resistance the al-Sansui of Cyrenaica (1911–1922). OGIRISI: A New Journal of African Studies, 9 (1), 1-43.
68. Ritchie, B., & Khorwatt, E. (2007). The attitude of Libyan auditors to inherent control risk assessment. The British Accounting Review, 39 (1), 39-59.
69. Saidane, D. (2010, March). Banking Services in Africa: The Regulatory and Institutional Dimension? Consolidation, Privatization. In Human Resources and Good Governance. In: Multi-Year Expert Meeting on Services, Development and Trade: The Regulatory and Institutional Dimension, Geneva, 17-19.
70. Sarbanes Oxley Act. (2002). One hundred seventh congress of the USA. An Act, US Sarbanes Oxley Act, 2002.
71. Senauth, F. (2013). The making and the revolution of Libya. Bloomington, USA: Xlibris Corporation.
72. Seward, J. K., & Walsh, J. P. (1996). The governance and control of voluntary corporate spin‐offs. Strategic Management Journal, 17 (1), 25-39.
73. Shalba, A. (2016). An investigation of the roles and responsibilities of the board of directors in the Libyan banking sector. (PhD, Nottingham Trent University). An Investigation of the Roles and Responsibilities of the Board of Directors in the Libyan Banking Sector.
74. Shariha, J E M et al., (2014). Corruption in the regime's apparatus and state institutions in Libya during Gadhafi’s rule. International Refereed Journal of Engineering and Science (IRJES), 3 (11), 01-03.
75. Shernanna, H. (2013). Critical Perspectives on the Efficient Implementation of Privatisation Policies in Libya: Assessing Financial, Economic, Legal, Administrative and Social Requirements (Doctoral dissertation, Durham University).
76. Stela, A., & Abdulsalam, A. (2016). The citizens satisfaction level on the Islamic banking system of Libya. Journal of Economics and Finance (IOSR-JEF), 7 (6), 12-22.
77. Sternberg, E. (1997). The defects of stakeholder theory. Corporate Governance: An International Review, 5 (1), 3-10.
78. The Libyan Banking Law, (2005). Tripoli – Libya.
79. The Libyan Commercial Code, (1953). Tripoli, Libya.
80. The Libyan Stock Market, (2007). Rules and Regulations of Libyan Stock Market: Libyan Code Corporate Governance, Tripoli, Libya.
81. Turley, S., & Zaman, M. (2014). The corporate governance effects of audit committee. Accounting and regulation, 133-159, Berlin, Germany: Springer.
82. UNESCO. (2017). http://whc.unesco.org/en/list/287/ ed, [Accessed 15th May 2020].
83. Van Genugten, S. (2016). Libya during the world wars: Other People’s battlefield. Libya in western foreign policies, 1911–2011, 25-43, Berlin, Germany: Springer.
84. Vandewalle, D. (2012). A history of modern Libya, Cambridge University Press.
85. Williamson, O. E. (1988). Corporate finance and corporate governance. The Journal of Finance, 43 (3), 567-591.
86. Wright, J. (2012). A history of Libya. New York: Columbia University Press.
87. Xypolia, I. (2016). The rocky road ahead to peace: The Arab uprisings and the conflict in Libya. Journal of Global Faultlines, 3 (1), 50-55.
88. Younes, A. M. (2013). Delivering management training and development programmes: A case of non-oil international organizations in post-crisis Libya after 2011. Modern Management Science & Engineering, 1 (2), 123.
89. Younes, A. M., Stewart, J., & Kyriakidou, N. (2013). MTDPNA in non-oil international organisations in Libyan post crisis. Business and Management Research, 2 (1), p18.
90. Zakari, & Menacere, K., (2012). The challenges of the quality of audit evidence in Libya. [La maniere de presenter un texte illustre] African J. Accounting, Auditing and Finance, Copyright © 2012 Inderscience Enterprises Ltd., 1 (1), 3-24.
91. Zway, S.A., (2017). Libya's Shadow Economy. Portland, USA: Mercy Corps, Humanitarian Access Team (HAT).