Corporate Governance and Performance of Nepalese Commercial Banks
Files
Date
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Central Department of Management
Abstract
Corporate governance has become one of most talked about issues around the world
to make financial and non-financial institution to become more accountable and
transparent. Financial institutions have major role in country's economy. The central
banks are responsible to make banking sector more reliable and governed. For
survival of banks it's equally important to have good performance. So this study is
mainly concerned to know the relationship between the corporate governance
variables and performance variables. Board member size, number of independent
variable, bank size, earning per share, capital adequacy ratio and leverage were taken
as independent variables whereas return on equity and net interest margin were taken
as dependent variables. The study was conducted among 11 commercial banks of
Nepal. The data were collected from the annual reports of the banks. Correlation and
regression analysis was used to determine the relationship and level of significance.
The result showed the relationship between board member size and return on equity
was negative whereas relationship between number of independent directors and
earnings per share were positive. The relationships with other variables were not
significant.
The banks should minimize the numbers of directors in board and add the number of
independent directors in banks for better performance. The central banks should focus
on growth of banks and properly govern the activities of banks.