Corporate governance and bank performance: Evidence from Bangladesh

Muttakin, Mohammad Badrul; Ullah, Md. Shahid

doi:10.22495/cbv8i1art5

Cited by 16 publications

(23 citation statements)

References 29 publications

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“…In addition, our findings also reveal that women's presence in boardrooms does not affect the performance of Bangladeshi banks. This finding is in line with the study of Muttakin and Ullah (2012), which documents no evidence of gender variety on banks' performance. Finally, the output reported in Table 3 indicates that the stock market performance of the banks is not always associated with banks' governance measures and indicators.…”

Section: Resultssupporting

confidence: 91%

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Corporate governance structure and bank performance: evidence from an emerging economy

Molla

Islam

Rahaman

2021

JEAS

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PurposeThe purpose of the paper is to explore the association between corporate governance mechanisms and the performance of listed banks in Bangladesh.Design/methodology/approachDynamic panel data of two-step System Generalized Method of Moments (SGMM) estimators are used to analyze the influence of corporate governance characteristics on the performance of banks operating in Bangladesh over a period of eleven years from 2008 to 2018.FindingsBy employing the two-step SGMM, the authors find statistical evidence to conclude that board size has a positive impact on banks' accounting performance. However, it does not influence the market performance of banks operating in Bangladesh. The authors’ results also suggest that outside independent directors, managerial ownership and females' participation on the board are not linked with the performance of the listed banks in Bangladesh. It signifies that the mere presence of outside directors and female directors in the board does not guarantee the enhancement of banks' performance and the minimization of agency conflict between shareholders and management. The persistent characteristic of bank performance is one of the crucial findings of this paper.Research limitations/implicationsThis research has some limitations as the study's findings may not be generalized to other countries or industries because the current study considered only the small sample size based on the availability of the data and focused only on the banks listed in the DSE. Moreover, this study may not represent the whole financial industry because it includes all listed and non-listed banks and non-bank financial institutions. Hence, the findings may not be applicable to the other industries operating in different business ecosystems.Practical implicationsThe findings of this analysis have some managerial implications. This study provides managers empirical evidence regarding the influence of corporate governance elements on banks' performance, and they can now identify the factors that should emphasize enhancing the bank performance. The findings demonstrate that policymakers, regulatory bodies and bank management should pay more attention to the banks' overall corporate governance structures, especially in the case of appointing independent and female directors to challenge the executive power and to prevent the repetition of financial irregularities and loan scams in the banking industry of Bangladesh. Furthermore, the regulatory authorities should ensure the banks follow the corporate governance guidelines precisely for building a resilient banking industry to attain sustainable development goals in the long run.Originality/valueThis paper is the first empirical in-depth analysis applying the most recent data that examines the effect of bank governance elements on the performance of all the banks listed in the Dhaka Stock Exchange to the best of our knowledge.

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Section: Resultssupporting

confidence: 91%

“…Furthermore, a few studies (Rahman and Islam, 2018; Muttakin and Ullah, 2012; Hoque et al , 2013) use the data from Bangladeshi banks to assess the influence of corporate governance, and prior studies have certain shortcomings. The significant limitations of the prior studies (e.g.…”

Section: Literature Reviewmentioning

confidence: 99%

Corporate governance structure and bank performance: evidence from an emerging economy

Molla

Islam

Rahaman

2021

JEAS

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“…This type of research uses research design to test hypotheses, namely by testing the dependent variable, namely the performance of the Maqashid Sharia index which is influenced by Characteristics of Sharia Supervisory Board (SSB) with indicators of reflection on the number of SSB members, double positions of SSB members, number of SSB meetings, and educational background of SSB members. This research indicator refers to previous studies such as Mukhibad (2019), Endraswati (2017), Almutairi & Quttainah (2016), Mollah & Zaman (2015), Kholid & Bachtiar (2015), Muttakin & Ullah (2012), Farook et al (2011), andGhayad (2008).…”

Section: Methodsmentioning

confidence: 99%

“…This study is motivated by the results of previous research studies, because previous studies showed inconsistent or conflicting results, including the relationship between Islamic governance and the Maqashid Islamic Index. Studies by Muttakin & Ullah (2012), Mollah & Zaman (2015), Meilani (2015), and Endraswati (2017) provide empirical evidence that Islamic governance has a positive effect on the temporary maqashid sharia index. Kholid & Bachtiar (2015) cannot explain the relationship between Islamic governance and the maqashid sharia index.…”

Section: Introductionmentioning

confidence: 99%

The Effect of the Sharia Supervisory Board Characteristics on Maqashid Sharia Index

Salman¹,

Kurniasari²

2020

IJIBEC

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The purpose of this study is to obtain empirical evidence regarding the influence of the characteristics of the Sharia Supervisory Board on the maqashid sharia index on sharia banks in Indonesia. The variables used in this study are the characteristics of the sharia supervisory board and maqashid sharia index. The characteristics of sharia supervisory boards are the educational background of sharia supervisory boards, number of sharia supervisory board meetings, concurrent positions of sharia supervisory boards, and indicators of the number of sharia supervisory boards. The maqashid sharia index uses indicators of welfare (maal), education (tahdzib al fard), and justice ('adl). The data used are secondary data in the form of annual reports of Islamic banks in Indonesia for a 5 years period (2013-2017). The research sample of eleven Islamic banks. Data analysis technique used is Partial Least Square (PLS). The findings of the study were successful in proving the negative influence of the number and educational background of the sharia supervisory board on the maqashid sharia index.

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“…Internal auditing is a critical function in assuring the efficacy and efficiency of operations, as well as identifying and controlling risks within organisations, particularly in the banking sector (Muttakin& Ullah, 2012). Many studies have focused on identifying the factors that influence the quality of internal audit in different countries (Dellai& Omri, 2016;Turetken et al, 2018).…”

Section: Introductionmentioning

confidence: 99%

Factors determining Internal audit quality in some selected banks in Bangladesh

Parves¹,

Bhuyan²

2023

IJSB

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The goal of this study was to identify and analyze the factors that influence the quality of internal audits in a sample of Bangladeshi banks. The study used a combination of qualitative and quantitative research methods and included a sample of banks chosen based on the size and representation of different regions in the country. Data was collected through interviews with internal auditors, management, and regulators, as well as analysis of internal audit reports and other relevant documents. The findings of the study showed that several factors contribute to the quality of internal audits in Bangladesh’s banking sector, including the independence and objectivity of the internal audit function, the expertise and qualifications of internal auditors, the adequacy of resources and support, and the effectiveness of communication and reporting. The study also identified areas for improvement, including the need for greater standardization and consistency in internal audit practices and the importance of aligning internal audit activities with the organization’s risk profile. These findings have implications for internal auditors, management, regulators, and other stakeholders in the banking industry, and offer recommendations for improving the quality of internal audits in Bangladesh.

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Corporate governance and bank performance: Evidence from Bangladesh

Cited by 16 publications

References 29 publications

Corporate governance structure and bank performance: evidence from an emerging economy

Corporate governance structure and bank performance: evidence from an emerging economy

The Effect of the Sharia Supervisory Board Characteristics on Maqashid Sharia Index

Factors determining Internal audit quality in some selected banks in Bangladesh

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