A grounded theory analysis of corporate governance in Egyptian banking

Purpose - The purpose of this paper is to investigate corporate governance (CG) practices of banking organizations in Egypt and seeks to understand the extent these can be considered socially constructed phenomenon. Design/methodology/approach - Through a qualitative research design underpinned by a combination of phenomenological and social constructivist paradigms the paper undertakes a grounded theory study of CG in a specific context (the Egyptian banking sector). The paper is based on a survey and 58 semi-structured interviews. Findings - CG as a dynamic and context-based phenomenon, which requires a processual mode of analysis rather than the widely accepted static approach. Empirical evidence that concerns whether the adoption of CG is based on achieving legitimacy is provided, which identifies that this is difficult to understand through traditional shareholder-stakeholder theories; economic rationality and efficiency fail to fully explain CG and investigation requires phenomenological constructivist approaches. Relationships between substantive and formal theories are identified and explored. Practical implications - Identification of the structural factors affecting CG in Egyptian banking, the processes involved for its handling and the consequences of the interaction between these areas provide policy-makers with an in-depth understanding which is necessary for effective governance reform. Through memos, coding and categorization the relationships between substantive theory and practice are rendered explicit. Originality/value - The paper demonstrates that through a phenomenological constructivist perspective a qualitative research design can offer new insights into CG phenomenon. The paper heeds calls for empirical research in CG that takes into account the institutional environment within which it is embedded.