Corporate Governance Mechanisms and Bank’s Performance Evidence from Nepalese Commercial Bank

Corporate Governance Mechanisms and Bank’s Performance Evidence from Nepalese Commercial Bank

Good governance is foremost in order to develop good corporate working culture. Governance includes all formal and informal rules under certain principles of accountability, transparency, and the rule of law. The implementation of corporate governance certainly influences the performance of the firm. This study focuses on the corporate governance practices implemented by the commercial banks of Nepal and their impact on the bank’s financial performance taking 11(2010-2020) years secondary data. The data were collected from Banking and Financial Statistics published by Nepal Rastra Bank. In addition to this, different published articles, reports, books, and magazines were also used. Multiple regression analysis was used to test the significance and importance of corporate governance in Nepalese Commercial Banks, where the dependent variable used was financial performance (ROA ROE and MB ratio), whereas the independent variables were Board Size, Independent directors, Board Meeting, Bank size, foreign ownership, government ownership, Bank Age. The result shows a positive relation of Age, Board size, independent directors, foreign ownership, firms’ size with the performance of the bank, whereas board meeting and government ownership shows negative relation.