CORPORATE GOVERNANCE AND PERFORMANCE OF HYDROPOWER COMPANIES IN NEPAL

Abstract

The main purpose of the study is to examine the This thesis, titled Corporate Governance and Performance of Hydropower Companies in Nepal, aims to explore the corporate governance practices and their impact on the financial performance of hydropower companies in Nepal. The review of literature reveals that corporate governance practices such as board diversity, audit committee independence, and gender diversity have varying effects on financial performance across different sectors and countries. Using correlation and regression analyses, the study examines the relationship between governance variables Board Size (BS), Audit Committee Size (ASC), Long-term Debt Ratio (LTDR), Audit Committee (AC), and Executive Compensation (EXC) and financial performance metrics such as Return on Assets (ROA) and Return on Equity (ROE). The findings indicate that ASC and AC have a significant positive impact on ROA, while BS and LTDR show a negative and positive relationship with ROE, respectively. However, variables like EXC and AC do not have a statistically significant effect on performance in either model. This suggests that while certain governance practices are important, their impact may be limited by external factors such as market conditions, regulatory frameworks, and company-specific characteristics. Overall, the study highlights the need for tailored governance practices that align with the unique operational context of hydropower companies in Nepal.