IMPACT OF CORPORATE GOVERNANCE ON BANK PERFORMANCE IN NEPAL

Abstract

The interaction between shareholders, the board of directors, and top management in deciding the corporation's performance and direction is known as corporate governance. It also covers the interactions between the stakeholders and the objectives that guide the corporation's governance. The study mainly aims to identify the dimensions that represents the corporate governance and banking performance. To examine the relationship between corporate governance and bank performance. The specific objectives of the study is to analyze the impact of corporate governance on bank performance of Nepalese commercial banks. In this study, a descriptive, informal research design was employed. A casual research design is employed to explain the relationship between several variables or characteristics and their causes. There are 19 commercial banks in this survey. Ten of the nineteen commercial banks in total have been selected for the study. The study found that the board size, earnings per share, and female director have a negative impact on ROA and NIM. Board size is statistically significant, whereas earnings per share and female director are statistically insignificant. Ethnical Group and capital adequacy ratio also have a positive effect on ROA and NIM. The capital adequacy ratio is statistically significant positive impact on performance. Thus Ethnical Group is significant. Hence, there is a linear link between ROA, NIM and the following factors: board size, earnings per share, ethnic group, capital adequacy ratio, and female directors. Key Words: Corporate Governance, Performance, ROA, NIM, Board and Ethnical Group.