Corporate governance has become an issue of global significance and has received newrnurgency due to various corporate scandals and failure. This paper investigates the impactrnof corporate governance mechanisms on firms' financial performance using five yearsrndata from the year 2007 to 2011 with a sample of eight Ethiopian commercial banks.rnThree financial performance indicators such as return on asset, return on equity and netrninterest margin were used. Corporate governance mechanisms considered in this studyrninclude board size, board gender diversity, board members educational qualification,rnboard members business management and industry specific experience, and auditrncommittee size. The study controls the effect of size, leverage and growth of banks. Thernregression results show that large size board and audit committee negatively influencesrnfinancial performance; whereas board members educational qualification positivelyrnassociated with financial performance. While industry specific experience of directorrnpositively related with return on asset but it has a negative effect on net interest margin.rnFinally, the percentage of female directors and board members business managementrnexperience does not have a significant effect. In general, the findings suggest that banksrnwith effective corporate governance mechanisms improve financial performancerndepending on the measure used although not all corporate governance mechanisms arernsignificant.rnKeywords: Corporate Governance Mechanisms, Agency Theory, Financial PerformancernCommercial Banks and Ethiopia