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Research Paper | Management | Nepal | Volume 8 Issue 8, August 2019 | Popularity: 7.2 / 10

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Impact of Corporate Governance Onfirm Performance in Context of Nepalese Commercial Banks

Sapana Sharma

Abstract: This research entitled Impact of corporate governance on firm performance in context of Nepalese commercial banks focus on relationship between corporate governance and firm performance in context of Nepalese listed commercial banks. Nine listed commercial banks over the time period from 2011 to 2016 were taken for analysis. To measure firm performance as a dependent variable ROE, ROA and Non-performing loan is used. Board size, numbers of female director, Board meeting, firm age, CEO duality, Audit committee, Total debt were used to measure corporate governance variable as independent variable. The data are collected from the Banking and Financial Statistics published by NRB, NRB directives, Company Act and Financial Institution Act, 2063; supervision report of Nepal Rastra Bank and annual report of every listed commercial banks. In addition to these, different published articles, report, books and magazines are also analyzed. The multiple regression models are applied to test the significance and importance of corporate governance in the Nepalese Commercial Banks. The result shows that there is a significant impact of corporate governance on ROA as well as ROE in the financial institution mainly Commercial Banks. Board meeting, board size, female director and CEO duality have negative and significant effect on firm performance however age of the firm, firm size and total debt have positive effect on firm performance based on return on assets. While regressing firm performance based on return on equity firm age is the major factor in determining the firm performance.

Keywords: Corporate governance, ROE, ROA, Firm size, Board size, Board meeting, number of female directors, Total debt and CEO duality

Edition: Volume 8 Issue 8, August 2019

Pages: 263 - 268

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