The Impact of Corporate Governance on Bank Performance: Empirical Evidence from Bangladesh
This paper effort to find out the impact of corporate governance practices on bank performance in Bangladesh. In this paper, we examine 85 observations from 17 publicly traded commercial banks listed in the Dhaka Stock Exchange (DSE) throughout 2013-2017. We used the econometric model and pooled ordinary least square regression analysis to find out the correlations and regression among independent variables (size of the board, board composition, and chief executive officer status) and dependent variables (return on asset, return on equity and earnings per share). This research reveals that the board of director has a significant positive impact on ROA, ROE, and EPS. Independent board of director has a significant positive impact on ROE and EPS. Chief executive officer has a significant positive impact on ROA. Also, most of the cases large bank size positively affecting the performance of Bangladeshi bank. Finally, there is a significant positive relationship between corporate governance and bank performance in Bangladesh. The findings of the paper will help the Bangladeshi banks to ensure proper corporate governance practices to optimize the performance of the banks leads to maximization of the stockholder’s wealth.
