Corporate governance in NBFIs and it’s impacts on company’s performance

Abstract

The study examines the impact of Corporate Governance on performance of Non-Banking Financial Institutions (NBFIs) in Bangladesh. Security and Exchange Commission (SEC) has a certain guideline for the Corporate Governance in our country for the listed companies. A total of four (04) hypotheses, taking Corporate Governance Mechanisms and Firm Characteristics into consideration as independent variables, are developed in order to find out the impacts on Firm Performance. Since the focus of the study is on the NBFIs, a total thirteen (13) number of institutions’ data, exerted from annual reports, and 65 of firm’s years have been observed. For the purpose of data analysis, regression analysis has been conducted using the statistical applications- SPSS and MS Excel. The study has found that there is no impact of female member inclusion in boardroom , and the same time Independent Director does not have influence on the performance of the NBFIs in Bangladesh. In contrast, the results support the hypotheses, relationship of Board of Director and Audit Committee with the performance of the company. Even though many researchers have suggested independent director and female member dictate good performance, this study refutes and concludes opposite view. The study have also seen the leverage, one of the firm characters, has strong relationship with the performance of NBFIs. This study gives an insight of the corporate governance in NBFIs in Bangladesh, gives limitations and proposes some recommendations to improve the corporate governance for the better financial performance.