THE POST COVID EFFECT OF CORPORATE GOVERNANCE ON FIRM PERFORMANCE: A STUDY ON PRIVATE COMMERCIAL BANK IN BANGLADESH

Abstract

Due to extensive corporate disgraces and catastrophes around the globe, there has been a transformed attention in the influence of corporate governance (CG) and firm performance (FP). The mainstream of research concerning CG and its effect on FP has been assumed in developed markets and countries, mostly the US and UK, but somewhat little indication is provided in the developing countries like Bangladesh. This report has examined the impact of corporate governance mechanisms on firm performance from Bangladesh’s perspective. This study primarily employs agency theory that indicates that the firms with strong corporate governance outperform firms with weaker governance. We used Board Size, Board composition, board expertise and CEO chair duality as variables of CG and EPS, ROA, and ROE as indicators of FP. We collected information from the managers, senior managers, and CFOs of private financial institutions (commercial banks) in Bangladesh for 2022-2023 financial years. The results reveal that size, composition and expertise of board could extremely influence FP positively whereas CEO chair duality could influence negatively. The outcomes of the analyses advocated that firms that comply with good corporate governance practices can expect to achieve higher return on assets and firm performance. It implies that worthy corporate governance applies lead to reduce the various costs inside the organization. Hence, it is concluded that firms of the developing world can possibly enhance their performance by implementing decent corporate governance practices. Therefore, it is desired for firm to separate CEO chair duality to achieve better performance through direct management supervision in Bangladesh.