Impact of Corporate Governance Norms on Bank Financial Performance in Bangladesh

Abstract

The study explored the affinity between corporate governance (CG) norms and bank financial performance using data compiled from the annual reports of Dhaka Stock Exchange-listed commercial banks in Bangladesh covering a period from 2016 to 2022. Both descriptive and inferential statistics capture the effects of CG norms on the financial performance of banks. The fixed effects model (FEM) results revealed that board independence, educational qualifications of CEOs, and long-serving CEOs are positively linked with the financial performance (measured as ROA) of banks in Bangladesh but are not statistically significant. The board meeting frequency is inversely and significantly related to ROA. Banks should ensure the enactment of sound CG norms to enhance banks' financial performance and protect the shelter less tiny shareholders. The regulatory authorities must ensure compliance with CG norms and enforce penalties for non-compliance to support the banking industry's growth. The study aspires to strengthen CG norms, which go beyond the rights and duties of various stakeholders in the management of a firm. The affinity between fund providers and the bank and its compliance with legal, ethical, and environmental needs, among other things, significantly contributed to expanding our knowledge base, both in theory and in reality.

Keywords

• bangladesh
• corporate governance
• dhaka stock exchange
• firm performance