A sound resilient banking system with good corporate governance is vital for the institutions to survive in an increasingly open environment. In light of the above, the study is important for the following reasons. The findings of the study are pertinent for policy-makers, corporate boards, executives and other stakeholders. This study might fill the gap in the literature by examining the corporate governance practices on the financial performance of banks in the case of Ethiopian commercial banks. Overall, since the financial sector of the country is relatively small, closed and much less developed than those of its neighbors the findings of this study will be very vital for understanding corporate governance practices and bank performance in a context of developing country.