Does corporate governance affect financial performance: A study of select Indian banks

Abstract

Need of corporate governance in present times is intense especially when the global instances of corporate failures and mismanagement are many. The eminence and uniqueness of banking firms necessitates the need of rational corporate governance practices more so with the added emphasis of Basel Committee on Banking Supervision. The study attempts to examine the role of board structures in the financial performance of select banks over a time span of 2008-15 in India where banking and governance both have hogged the limelight sadly for not very pleasant reasons. Analyzing a small sample of 70 firm entries through panel regression, the study establishes Chairman-CEO duality, average remuneration of directors, board committees and female directors as significant influencers of bank performance. Certain limitations of the study though challenge the generalization of results but it forms a good basis for further research.