Abstract:
Corporate governance is considered to have significant implications for the growth
prospects of an economy. Good corporate governance practices are regarded as
important in reducing risk for investors, attracting investment capital and improving
the performance of companies. However, the way in which corporate governance is
organized differs between countries, depending on their economic, political and
social contexts.
The main objectives of this study are to find out the relationship between corporate
governance and banking performance and also find out the impact of corporate
governance on banking performance. This study focused on four aspects of corporate
governance namely; Board Size (BS), Board Diversity (BD), Outside Directors
Percentage (OSDP), Board Meeting Frequency (MF) & Audit Committee Meeting
Frequency (AM). Banking performance has been measured through Return on Assets
(ROA). The study used secondary data of 11 commercial banks covering the period
of 2008 to 2017. Data were analysed using regression analysis and E-Views packages.
The empirical results of the present study indicate that there is positive relationship
between Outside Directors Percentage (OSDP), Board Meeting Frequency (MF),
Board Size (BS), and Audit Committee Meeting Frequency (AM) with Return on
Assets (ROA). Further Board Diversity (BD) has a negative impact on Return on
Assets (ROA). This study will be benefited to all investors other than the bank sector
investors.
