Corporate Governance, Substantive Theory and Sociological Institutionalism: The Case of the Egyptian Banking Sector

Banking organizations have peculiar characteristics that make it difficult for them to adopt and apply traditional corporate governance models. However, little attention has been given to understanding and theorizing banking corporate governance. Deploying a grounded theory methodology this paper develops a substantive theory of banking corporate governance within Egypt. Subsequently, through sociological institutionalism the substantive theory is further analyzed and assessed; findings indicate that banking corporate governance is an evolving context or contingency based phenomenon. Corporate governance for banks in Egypt involves an institutionalization process based on regulative and normative pressures that looks to ensure legitimacy from shareholders, regulators and depositors. This said, to maintain legitimacy banks either comply or disguise their non-compliance. Overall, this paper contributes to non-traditional corporate governance theorizing and offers policy-makers a distinct in-depth understanding of the phenomenon.