Journal of Finance and Accounting

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Internal Corporate Governance and Financial Performance Nexus; a Case of Banks of Pakistan

Received: 29 August 2017    Accepted: 05 December 2017    Published: 20 January 2018
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Abstract

The persistence of corporate governance (CG) is to expedite operative and cautious management which can transport the enduring success of the company. The performance of any firm or bank is vibrantly enhanced by corporate governance. The key contribution of this study to governance literature is that; it demonstrates how the presence of the internal governance mechanism influence the bank performance. The study makes an attempt to measure the impact of internal governance indicators (Board Structure and Ownership Structure) on the financial performance (Return on Equity, Return on Assets and Earning Per Share) of the banks of Pakistan under the presence of control variables (leverage and size). The selected sample consist of 30 banks (public, private and specialized), which are listed at Pakistan Stock Exchange (PSE) for the period 2008-2014. The study takes 30 banks listed in PSE, formerly KSE and, check how corporate governance impact on all the listed banks at PSE, irrespective of their nature of operation. Study also extended the time frame till 2014. The study comprises of three models. The regression analysis results reveal that the majority of the internal governance indicators of Model 2 and 3 show significant relationship with ROE and EPS whereas, majority of the internal governance indicators of Model 1 depict insignificant relationship with ROA. The results depict that in a developing country like Pakistan there are sound codes of corporate governance but, their proper implementation is missing.

DOI 10.11648/j.jfa.20180601.12
Published in Journal of Finance and Accounting (Volume 6, Issue 1, January 2018)
Page(s) 11-17
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Corporate Governance, Board Structure, Ownership Structure, Financial Performance, PSE

References
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Author Information
  • School of Commerce & Accountancy, Minhaj University, Lahore, Pakistan

  • School of Commerce & Accountancy, Minhaj University, Lahore, Pakistan

  • School of Commerce & Accountancy, Minhaj University, Lahore, Pakistan

  • Pakistan Institute of Development Economics, Islamabad, Pakistan

  • School of Commerce & Accountancy, Minhaj University, Lahore, Pakistan

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  • APA Style

    Uzma Bashir, Ummara Fatima, Sundas Sohail, Farhat Rasul, Rabia Mehboob. (2018). Internal Corporate Governance and Financial Performance Nexus; a Case of Banks of Pakistan. Journal of Finance and Accounting, 6(1), 11-17. https://doi.org/10.11648/j.jfa.20180601.12

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    ACS Style

    Uzma Bashir; Ummara Fatima; Sundas Sohail; Farhat Rasul; Rabia Mehboob. Internal Corporate Governance and Financial Performance Nexus; a Case of Banks of Pakistan. J. Finance Account. 2018, 6(1), 11-17. doi: 10.11648/j.jfa.20180601.12

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    AMA Style

    Uzma Bashir, Ummara Fatima, Sundas Sohail, Farhat Rasul, Rabia Mehboob. Internal Corporate Governance and Financial Performance Nexus; a Case of Banks of Pakistan. J Finance Account. 2018;6(1):11-17. doi: 10.11648/j.jfa.20180601.12

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  • @article{10.11648/j.jfa.20180601.12,
      author = {Uzma Bashir and Ummara Fatima and Sundas Sohail and Farhat Rasul and Rabia Mehboob},
      title = {Internal Corporate Governance and Financial Performance Nexus; a Case of Banks of Pakistan},
      journal = {Journal of Finance and Accounting},
      volume = {6},
      number = {1},
      pages = {11-17},
      doi = {10.11648/j.jfa.20180601.12},
      url = {https://doi.org/10.11648/j.jfa.20180601.12},
      eprint = {https://download.sciencepg.com/pdf/10.11648.j.jfa.20180601.12},
      abstract = {The persistence of corporate governance (CG) is to expedite operative and cautious management which can transport the enduring success of the company. The performance of any firm or bank is vibrantly enhanced by corporate governance. The key contribution of this study to governance literature is that; it demonstrates how the presence of the internal governance mechanism influence the bank performance. The study makes an attempt to measure the impact of internal governance indicators (Board Structure and Ownership Structure) on the financial performance (Return on Equity, Return on Assets and Earning Per Share) of the banks of Pakistan under the presence of control variables (leverage and size). The selected sample consist of 30 banks (public, private and specialized), which are listed at Pakistan Stock Exchange (PSE) for the period 2008-2014. The study takes 30 banks listed in PSE, formerly KSE and, check how corporate governance impact on all the listed banks at PSE, irrespective of their nature of operation. Study also extended the time frame till 2014. The study comprises of three models. The regression analysis results reveal that the majority of the internal governance indicators of Model 2 and 3 show significant relationship with ROE and EPS whereas, majority of the internal governance indicators of Model 1 depict insignificant relationship with ROA. The results depict that in a developing country like Pakistan there are sound codes of corporate governance but, their proper implementation is missing.},
     year = {2018}
    }
    

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  • TY  - JOUR
    T1  - Internal Corporate Governance and Financial Performance Nexus; a Case of Banks of Pakistan
    AU  - Uzma Bashir
    AU  - Ummara Fatima
    AU  - Sundas Sohail
    AU  - Farhat Rasul
    AU  - Rabia Mehboob
    Y1  - 2018/01/20
    PY  - 2018
    N1  - https://doi.org/10.11648/j.jfa.20180601.12
    DO  - 10.11648/j.jfa.20180601.12
    T2  - Journal of Finance and Accounting
    JF  - Journal of Finance and Accounting
    JO  - Journal of Finance and Accounting
    SP  - 11
    EP  - 17
    PB  - Science Publishing Group
    SN  - 2330-7323
    UR  - https://doi.org/10.11648/j.jfa.20180601.12
    AB  - The persistence of corporate governance (CG) is to expedite operative and cautious management which can transport the enduring success of the company. The performance of any firm or bank is vibrantly enhanced by corporate governance. The key contribution of this study to governance literature is that; it demonstrates how the presence of the internal governance mechanism influence the bank performance. The study makes an attempt to measure the impact of internal governance indicators (Board Structure and Ownership Structure) on the financial performance (Return on Equity, Return on Assets and Earning Per Share) of the banks of Pakistan under the presence of control variables (leverage and size). The selected sample consist of 30 banks (public, private and specialized), which are listed at Pakistan Stock Exchange (PSE) for the period 2008-2014. The study takes 30 banks listed in PSE, formerly KSE and, check how corporate governance impact on all the listed banks at PSE, irrespective of their nature of operation. Study also extended the time frame till 2014. The study comprises of three models. The regression analysis results reveal that the majority of the internal governance indicators of Model 2 and 3 show significant relationship with ROE and EPS whereas, majority of the internal governance indicators of Model 1 depict insignificant relationship with ROA. The results depict that in a developing country like Pakistan there are sound codes of corporate governance but, their proper implementation is missing.
    VL  - 6
    IS  - 1
    ER  - 

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