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                       FINANCE AND BANKING 
                                                                  AFBR VOL 8 NO 1 (2024) P-ISSN 2576-1196  E-ISSN 2576-120X                                                                                                                                                                     

                                                                                                                                        Journal homepage: https://www.cribfb.com/journal/index.php/afbr 

                            Published by Australian Finance & Banking Society                                                                                                                                                                                                   

THE POST COVID EFFECT OF CORPORATE GOVERNANCE ON 

FIRM PERFORMANCE: A STUDY ON PRIVATE COMMERCIAL 

BANK IN BANGLADESH              
 

 Md. Sazzadur Rahman Khan (a)1   Sanjida Akhtar (b)   Sazia Afrin (c)   Md Gulam Sharoar Hossain Khan (d)   

 

(a) Assistant Professor, Faculty of Business Administration, American International University-Bangladesh; E-mail: Sazzadur@aiub.edu 
(b) Lecturer, Faculty of Business Administration, American International University-Bangladesh; E-mail: sanjida@aiub.edu 
(c) Assistant Professor, Faculty of Business Administration, American International University-Bangladesh; E-mail: sazia.afrin@aiub.edu 
(d)Associate Professor, Department of Business Administration, Stamford University Bangladesh; E-mail: sharoar@stamforduniversity.edu.bd 
 

 
A R T I C L E I N F O 
 

 

Article History: 
 

Received: 15th October 2023 

Reviewed & Revised: 16th October 2023  

to 9th February 2024  

Accepted: 10th February 2024 

Published: 15th February 2024  

 
Keywords: 

 

Corporate Governance, Firm Performance,  

Post-Covid, Bangladesh. 

 
JEL Classification Codes: 

  

G34, L25. 

 

Peer-Review Model:  
 

External peer-review was done through  

Double-blind method. 
 

  

 
A B S T R A C T 
 
Due to extensive corporate disgraces and catastrophes around the globe, there has been a transformed 

attention in the influence of corporate governance (CG) and firm performance (FP). The mainstream of 

research concerning CG and its effect on FP has been assumed in developed markets and countries, 

mostly the US and UK, but somewhat little indication is provided in the developing countries like 

Bangladesh. This report has examined the impact of corporate governance mechanisms on firm 
performance from Bangladesh’s perspective. This study primarily employs agency theory that indicates 

that the firms with strong corporate governance outperform firms with weaker governance. We used 

Board Size, Board composition, board expertise and CEO chair duality as variables of CG and EPS, 

ROA, and ROE as indicators of FP. We collected information from the managers, senior managers, and 

CFOs of private financial institutions (commercial banks) in Bangladesh for 2022-2023 financial years. 

The results reveal that size, composition and expertise of board could extremely influence FP positively 

whereas CEO chair duality could influence negatively. The outcomes of the analyses advocated that 
firms that comply with good corporate governance practices can expect to achieve higher return on 

assets and firm performance. It implies that worthy corporate governance applies lead to reduce the 

various costs inside the organization. Hence, it is concluded that firms of the developing world can 

possibly enhance their performance by implementing decent corporate governance practices. Therefore, 

it is desired for firm to separate CEO chair duality to achieve better performance through direct 

management supervision in Bangladesh.   

 
 

© 2024 by the authors. Licensee Australian Finance & Banking Society. This article is an open-access 

article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) 

license (http://creativecommons.org/licenses/by/4.0).                           

 

INTRODUCTION 

CG and its effect on FP have been a significant research interest area for strategic management accounting literature in this 

post covid era. Companies need to adhere to their code of governance and committee’s recommendations to protect their 

shareholders’ interest and provide value-adding services (Alfawareh et al., 2024). From a theoretical perspective, companies 

want to reduce their agency problems (costs) through good governance practices which in turn will enhance overall 

performance of their firm. The crux of rationale between good CG practices and improve FP is that through better 

governance, the board can significantly improve their monitoring capabilities over managerial activities which in turn 

deprive managers from earning management activities and misappropriation of firm’s resources (Saidat et al., 2024). Good 

CG practices also encourage management to pursue value-adding activities for the organization and reduce misappropriation 

of firm’s limited resources.  

Our study analyses the effects of the post covid effect of CG on FP - A study on private commercial bank in 

Bangladesh. We chose the Bangladesh for this investigation because in this emerging economy private commercial bank 

plays a significant role and our research findings will promote effective management system and enhance their 

entrepreneurial spirit of the company.  

A vast majority of CG literature focuses on agency theory which explains how the agents (managements) can act 

in interest of their own rather than interest of their principal (owner) when control is separated from owner. This leads to an 

                                                      
1Corresponding Author: ORCID ID: 0000-0002-2462-8471 

© 2024 by the authors. Hosting by Australian Finance & Banking Society. Peer review under responsibility of Australian Finance & Banking Society. 
https://doi.org/10.46281/afbr.v8i1.2189 

 

To cite this article: Khan, M. S. R., Akhtar, S., Afrin, S., & Khan, M. G. S. H. (2024). THE POST COVID EFFECT OF CORPORATE GOVERNANCE 
ON FIRM PERFORMANCE: A STUDY ON PRIVATE COMMERCIAL BANK IN BANGLADESH. Australian Finance & Banking Review, 8(1), 1-

10. https://doi.org/10.46281/afbr.v8i1.2189 

 

https://orcid.org/0000-0002-2462-8471
http://creativecommons.org/licenses/by/4.0/)
http://creativecommons.org/licenses/by/4.0/)
https://www.openaccess.nl/en
https://doi.org/10.46281/afbr.v8i1.2189
https://orcid.org/0009-0003-2136-5535
https://orcid.org/0000-0001-9157-8948
https://orcid.org/0000-0003-2333-5842


Khan et al., Australian Finance & Banking Review 8(1) (2024), 1-10 

 

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agency issue between principal and agent which refer to as Type I problem. However, conflicting interest could further 

emerge between principal and principal (Type II problem) and is a growing research interest in emerging markets like 

Bangladesh. Here, in this Type II problem between principals and principals, majority stockholders can move up to the role 

of executives and control the operating and strategic management activities for their own interest in expense of interest of 

their minority counterpart.  To reduce this agency’s costs, agency theory promotes a good CG system. This theory ensures 

the interests align for all owners and deters non-stewardship behavior of the controlling party. Therefore, every organization 

should have some form of governance and incentive system as a watchdog mechanism over agents’ activities to enhance its 

overall performance. 

According to Shleifer and Vishny (1986), firms can install different kind of mechanisms (both internal and external) 

to mitigate agency related expenditures. From emerging market perspective, governance mechanisms such as monitoring 

play a pivotal role to mitigate this conflict between managers and stockholders. To manage agency costs and enhance FP, 

many of these literatures portray the importance of this internal CG mechanism. Existing literature also performs the inter-

relationship analysis of ownership, board of directors, and executive remuneration and how these individual factors are used 

to manage agency costs and improve value of firm through enhancing FP. Research of Ntim et al. (2015), also shows an 

interesting relation between executive remuneration and governance mechanism to FP. Therefore, firm is using an effective 

CG mechanism in designing executive compensation packages. These findings also suppurated by Nelson (2005); Klapper 

and Love (2004); Wintoki et al. (2012), who shows in their analysis that good CG practices not only enhance FP but also 

influence executive remuneration packages in the firm through better performance.  

From Bangladesh’s perspective, most of the firms are managed by family members and these members are serving 

as key players in Boards and team of management. From one aspect, the issue of these family run businesses can be a 

positive implication for the success of the company as they will be acting as stewards of the company to uphold their family 

values and the success of the company. These members will also be acting in good faith to realize their investment return 

from their long term’s investment. However, long association of these family members as key personnel can act as a 

deterrent from their role as independent director. Therefore, family run governance mechanisms can violate minority 

shareholder’s interest. Therefore, large owners with significant shareholding rights can exercise direct influence in 

governance and pursue their own interest and personal benefits.  

The layout of this report is as follows. Part 1 contains theoretical perspective; Part 2 explains CG literature review, 

part 3 put through the in-depth model description, sample and data set used for our analysis. Part 4 shows the result and 

findings of our empirical analyses. Lastly, Part 5 end this study by summarizing the overall findings and briefly describing 

our key contributions. We also put forward the shortcoming of our study in this section and highlight avenues for further 

research interest. 

 

LITERATURE REVIEW 

CG is a mechanism through for supervising and directing internal and external factors of the company towards its long-term 

strategic success. It consists of a specific list of rules and guidelines through which a firm can promote good governance 

practices and safeguard minority shareholders’ interest and those of outside investors. It helps to deter the opportunistic 

behavior of board of directors or shareholders with significant rights and voting power. The overall code of governance 

could be subdivided into internal and external perspective. Here, internal factors could be referred to as the internal policy, 

strategic actions, management decision-making process, reporting system, different committees and their function, 

employees etc. External factors consist of those outside the organization such as customers, financial institutions, suppliers, 

government and regulatory bodies, competitors and so on. The overall aim of the CG is to promote the best practices through 

adherence with its fundamental principles and protect the rights and interest of these different internal and external parties 

and achieve overall strategic growth and success.  

 

Board Size 

The degree of board size is an important feature for good CG (Kakanda et al., 2016). It consists of those directors who are 

actively performing on company’s board (Ogege & Boloupremo, 2014, Vafeas, 1999). Singh and Harianto (1989), analyses 

board size in terms of agency theory and suggests that it is directly linked to company performance through effective and 

efficient monitoring system. Again, Hillman and Dalziel (2003) analyses board size from theory of resource dependence 

perspective and shows that board size affect directors’ decision during they provide provision for intangible resources and 

thus enhance FP (Kiel & Nicholson, 2003).  

Afrifa and Tauringana (2015) also suggest that size of the board is related positively to FP through their study of 

listed small and medium companies in UK. Kiel and Nicholson (2003) show the same in large Australian companies. Saibaba 

and Ansari (2013), Babatunde and Olaniran (2009) also found similar positive relation. Dehaene et al. (2001) also conclude 

positive link between board size and company performance. Dalton et al. (1999), Adams and Mehran (2005), Beiner et al. 

(2006), Daily (1997), also portray similar relationship between FP and board size. 

However, researchers from emerging markets economy shows a varied results compared to those of firms in 

developed nations. The board size has a direct co-relation on company valuation according to Khanchel El Mehdi (2007). 

He found this positive relation during his study on listed firms in Tunisia. Others argue that larger board may provide greater 

benefits to firms (see, for example, Kiel & Nicholson, 2003, Coles et al., 2006); Few scholars even portray the smaller board 

can be coordinated easily to be more effective (Hermalin & Weisbach, 2014; Eisenberg, Sundgren, & Wells, 1998, Mallin, 

2005, Hossain et al., 2001; Kiel & Nicholson, 2003). In terms controlling perspective, reduced board size is easier to 



Khan et al., Australian Finance & Banking Review 8(1) (2024), 1-10 

 

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manageable. Larger board is difficult to control which could create agency problems and could affect boards overall 

performance. (Hermalin & Weisbach, 2014; Chaganti et al., 1985).  

 

Board Composition 

The composition of board refers to those directors acting as non-executive within a board, as highlighted by Kakanda et al. 

(2016). This composition is expressed as ratio of those directors not acting as executive to total number of directors, as 

articulated by Marn and Romuald (2012). Increased presence of these directors contributes to greater board freedom, 

enhanced unbiased behavior among board members and improved performance (Fama & Jensen, 1983). According to 

agency theory, this type of board controlled is better positioned to pursue stockholders' interests, thereby enhancing 

performance through effective management oversight and control (Hermalin & Weisbach, 1988). Harvey et al. (2015) 

explored link between CG practices and PF of South African companies, revealing positive association between board 

composition and FP.  

 

CEO-Chairman Duality 

CEO duality, a term denoting the leadership structure wherein CEO concurrently positioned as board’s chair, has sparked 

debates among scholars regarding its effect on company performance. Two fundamental schools of thought exist on this 

issue, with one group, adhering to agency theory, advocating for the parting of the CEO-Chairman roles to enhance FP 

(Shleifer & Vishny, 1997; Harris & Helfat, 1998; Gillan, 2006). According to this perspective, having distinct roles allows 

the board to exercise neutral authority in supervising CEO's responsibilities. Conversely supports the idea of the CEO 

holding both positions, aligning with the stewardship theory. Advocates argue that when a same individual performs CEO 

and Chairman Roles, it confirms effective supervision throughout the organization (Davis, Schoorman, & Donaldson, 1997, 

Adams, Almeida, & Ferreira, 2005; Finkelstein & D’Aveni, 1994). However, Arouris et al. (2011) state that CEO duality 

and board size has no significant effect on FP when performing his study in GCC nations. 

 

Board Expertise 

Ensuring the successful execution of the oversight function by the board requires a critical element-board expertise (Yatim, 

2010). Contend that directors serving on multiple boards gain enhanced skills, knowledge, and expertise, thereby improving 

their ability to oversee managerial activities. From a theoretical standpoint, theory of resource dependency asserts that 

directors acting in multiple board can leverage external resources, facilitating access to external linkages and ensuring 

effective business operations, ultimately contributing to enhanced firm effectiveness (Kiel & Nicholson, 2003). Similarly, 

Yatim (2010) emphasizes the significance of board expertise in the successful execution of the oversight function. 

In a study involving 33 maritime companies listed in US over 1999-2010, Andreou et al. (2014) recognized that 

the number of directors serving on other boards and FP are positively correlated, as well as financial management decisions. 

Board expertise emerges as a critical mechanism for effective FP. Christy et al. (2009) performed his study on Australian 

firms and exhibit declining market Return on Equity (ROE) when an increasing number of directors possess business 

knowledge. Kato and Kubo (2006) identify a direct link between CEO remuneration and the FP by measuring Return on 

Assets of Japanese firms. 

 

Hypothesis 

H1: There is a positive and significant relationship between board size and FP. 

H2: There is a positive and significant relationship between board composition and FP. 

H3:  There is a positive relationship between board chair duality and FP. 

H4:  There is a positive relationship between board expertise and FP. 

 

Conceptual framework 

 

 

 

 

 

 

 

 

 

 

 

Figure 1. Conceptual framework 

 

MATERIALS AND METHODS 

A quantitative study was conducted to determine the relationship between dependent and independent variables. Primary 

data was used using the survey questionnaire. A total of 560 questionnaires were distributed and 379 questionnaires were 

received. A total of 18 questionnaires were discarded due to incomplete responses. Finally, a total of 361 responses were 

    CG indicators 

        -Board size 
-Board composition 

-Board chair duality 

       -Board expertise 

 

FP indicators 

-Return on Assets (ROA) 

- Return on Equity (ROE) 
- Earning per Share (EPS) 

 

 



Khan et al., Australian Finance & Banking Review 8(1) (2024), 1-10 

 

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considered for final data analysis. The questionnaire was sent to officers, officers, managers, senior managers and CFOs of 

the listed companies in Bangladesh. Of the total number of respondents, 30% were female and 70% were male. 60% of 

respondents have more than 15 years of experience in their respective field. In addition, 30% of respondents have considered 

financial institutions such as banks and insurance companies as well as non-bank financial institutions. The data normality 

test was performed by tracking skewness and kurtosis. Table 1 showed that all skewness and curvature values of each 

element were within the range (+/-2), ensuring the normality of the data. The Variable was measured based on the previous 

study (Table 2). 

 

Table 1. Mean, Median, SD, Skewness and kurtosis 

 
Name Mean Median SD Excess kurtosis Skewness 

Board size 3.337 4 0.795 -1.090 -0.687 

Board Composition 3.235 4 0.843 -1.448 -0.472 

CEO-Chair Duality 3.378 4 0.839 -1.100 -0.814 

Board expertise 3.296 4 0.798 -1.195 -0.590 

ROA 2.592 3 1.009 -0.991 -0.316 

ROE 2.541 3 1.002 -1.021 -0.269 

EPS 2.918 3 0.817 0.441 -0.760 

 

Table 2. Variables Measurement 

 
Variable  Measure  Sources 

Board Size Numbers of board members 

1 = 2 to 5 

2 = 6 to 10 

3 = 11 to 15 

4 = more than 15 

Guest  (2009) 

Board composition The percentage of membership held by the outside 

independent directors 

1 = 10% to 20% 

2 = 20% to 30% 

3 = more than 30% 

Rechner et al., 1993 

CEO-Chair duality This is a dummy variable which takes the value of 1, if the 

CEO combines as the board chairman and 2 if there are 

different people occupying the two positions of CEO and 

board chairman. 

Combs et al. (2007) 

Board expertise Year of experiences 

1 = 2 years to 5 years 

2 = 6 years to 10 years 

3 = 11 years to 15 years 

4 = more than 15  

Schnatterly et al. (2021). 

FP Measured by following three higher order constructs: 

Return on Assets (ROA): 

1 = 0% to 10% 

2 = 10% to 20% 

3 = 20% to 30% 

4 = more than 30% 

Return on Equity (ROE): 

1 = 0% to 10% 

2 = 10% to 20% 

3 = 20% to 30% 

4 = more than 30% 

Earnings per Share (EPS): 

1 = 0% to 10% 

2 = 10% to 20% 

3 = 20% to 30% 

4 = more than 30% 

 

 

Selling and Stickney (1989). 

 

 

Kakanda et al (2016). 

 

 

 

 

Islam et al. (2014). 

 

RESULTS  

Measurement Model Analysis 
PLS-SEM software was used for data analysis in this study. By following the three steps given by Hair Jr et al. (2020), the 

reliability and validity was measured. For construct reliability, outer loading, Cronbach's alpha and average variance 

extracted (AVE) were considered for this study. The threshold value for the outer loading of each element of the constructs 

is 0.70. All outer loads in this study were found to be greater than 0.70. In the case of Cronbach's alpha and composite 

reliability, the threshold limit is also greater than 0.70.  

 



Khan et al., Australian Finance & Banking Review 8(1) (2024), 1-10 

 

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Table 3. Construct Reliability 

 
First order Second order Outer 

Loading 

Cronbach's 

alpha 

Composite 

reliability 

(rho_a) 

Composite 

reliability 

(rho_c) 

AVE 

Board Composition Single item 1.00 
    

Board expertise Single item 1.00 
    

CEO-Chair Duality Single item 1.00 
    

EPS FP 0.83 0.782 0.705 0.823 0.608 

ROA 0.76 

ROE 0.75 

Board size Single item 1.00 
    

 

Table 3 showed that all the values of Cronbach's alpha and composite reliability is more than 0.70. For the average 

variance extracted (AVE), the standards value for reliability is at least 0.50. Table 3 indicated that the AVE is also found 

the above over threshold limit. Thus, the construct liability is ensured.  

 

Table 4. Construct validity (Crossed loading) 

 
  Board 

Composition 

Board 

Expertise 

Board 

Size 

CEO-Chair 

Duality 

FP 

Board Composition 1.000 0.109 0.111 0.077 0.332 

Board expertise 0.109 1.000 0.696 0.153 0.547 

CEO-Chair Duality 0.077 0.153 0.115 1.000 0.176 

EPS 0.310 0.507 0.514 0.179 0.830 

ROA 0.101 0.429 0.401 0.098 0.758 

ROE 0.345 0.323 0.335 0.121 0.748 

Board size 0.111 0.696 1.000 0.115 0.545 

 

For construct validity measurement, there are also three steps have followed (Hair et al., 2017). First crossed 

loading, table 4 indicated that crossed loading of each items is more than in compare with the other construct’s items. 

 

Table 5. Construct validity- Fornell-Larcker’s criterion 

 
  Board 

Composition 

Board 

Expertise 

Board 

Size 

CEO-Chair 

Duality 

FP 

Board Composition 1.000 
    

Board Expertise 0.109 1.000 
   

Board Size 0.111 0.696 1.000 
  

CEO-Chair Duality 0.077 0.153 0.115 1.000 
 

FP 0.332 0.547 0.545 0.176 0.780 

 

Fornell-Larcker’s criterion. According to the Fornell and Larcker (1981), the value of each construct must be 

greater than the other constructs. In this study, table 5 showed that all values are found greater than with the others value 

of each row and column. 

 

Table 6. Construct validity-HTMT 

 
  Board 

Composition 

Board 

Expertise 

Board 

Size 

CEO-Chair 

Duality 

FP 

Board Composition           

Board Expertise 0.109 
   

  

Board Size 0.111 0.696 
  

  

CEO-Chair Duality 0.077 0.153 0.115 
 

  

FP 0.390 0.650 0.645 0.205   

 

 Heterotrait- Monotrait Ratio (HTMT) of correlation method (Henseler et al., 2015). Under this method, all 

values should be less than 0.90 and table 6 showed that all values have found less than 0.90 and thus ensured constructs 

validity.  

 

Structural Model Analysis 

Table 7. Path Co-efficient 

 
Hypothesis Path 

Coefficient 

STDEV T statistics  P values Bias Corrected Supported 

2.50% 97.50% 

Board Size -> FP 0.300 0.137 2.193 0.028 0.047 0.583 Yes 

CEO-Chair Duality -> FP 0.076 0.073 1.032 0.302 -0.071 0.217 No 

Board Expertise -> FP 0.298 0.129 2.307 0.021 0.024 0.537 Yes 

Board Composition -> FP 0.260 0.083 3.124 0.002 0.094 0.422 Yes 



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Table 7 explained the result of path relationship of different components of CG (board size, CEO-Chair duality, 

and board expertise and board composition) and FP (ROA, ROE and EPS) by using of 5000 bootstrapping. Table 7 stated 

that board size is statistically significant predictor of FP (β = 0.30, t = 2.193, p= 0.028). However, 97.5% BCa CI was [0.047; 

0.583] which contains no zero in between upper limit and lower limit of this confidence interval, representing significant 

positive relationship and hence hypothesis 1 was supported. Similarly, path coefficient of board expertise  FP (β = 0.298, 

t = 2.307, p = 0.021); board composition FP (β = 0.260, t = 3.124, p = 0.002); were statistically significant positive 

relationship and thus H3and H4, were supported. However, path coefficient of CEO-Chair duality  FP (β = 0.076, t = 

1.032, p = 0.302) were not statistically significant positive relationship and thus H2 was not supported.  

 

 
Figure 2. Graphical Presentation of Path Coefficient 

 

Figure 2 showed the graphical presentation of the result of path coefficient.  

 

DISCUSSIONS 

The present investigation centered on the impact of CG on the performance of Bangladeshi private banks (commercial), 

examining from the principal-agency theory perspective. It established a link between research on CG and FP in emergent 

nations like Bangladesh. Widely accepted belief is that intensified CG is connected with improved FP. Our findings further 

support the idea that interplay of CG significantly influences FP. This research added to current body of literature by 

proposing that the performance of firms in emerging economies is contingent upon factors namely board size, composition, 

and firm’s expertise. In general, our study's results align with the principal-agency theory, suggesting its potential to enhance 

the efficacy of CG. Our study also found that the performance of non-executive directors on board is also crucial to fosters 

good governance. The findings reveal a positive and statistically noteworthy link between the quantity of non-executive 

directors and FP at the 5% significance level. Therefore, we accept the hypothesis that a greater percentage of non-executive 

directors on the board correlates with enhanced performance. The findings from the study on CEO chair duality do not align 

with the hypothesis proposing that the segregation CEO and chairman roles to enhance performance, leading to rejection of 

the hypothesis at the 5% significance level. Consequently, the outcomes of the current study align with prior literature, 

suggesting that the segregation of CEO and chairman roles may negatively impact FP enhancement in Bangladesh 

perspective. Researchers have endeavored to examine the optimal directors number required on board for improved FP. 

According to widely acknowledged consensus, there is positive correlation between size of board and FP. The findings from 

our study indicate a positive and noteworthy correlation between board size and FP, measured through metrics namely ROA, 

ROE, and EPS. As such, hypothesis positing negative correlation between size of corporate board and FP is refuted. 

Nevertheless, this outcome aligns with Dalton et al. (1998) conclusion, which also identified positive and meaningful 

correlation between size of board & FP. Moreover, firm size demonstrates a significant positive relationship, while leverage 

has exhibit strong relationship with FP, echoing the conclusions of Mashayekhi and Bazaz (2008), where positive and 

significant coefficients on firm size suggest a favorable impact on performance. 

 

CONCLUSIONS 

Our research validates the notion that CG rules and practices do enhance firms' performance and contribute to the 

sustainability of banks in Bangladesh. However, our study is not without limitations. This study focused specifically on a 

particular country and was limited to listed banks, resulting in a predominance of large firms in the sample. Incorporating 



Khan et al., Australian Finance & Banking Review 8(1) (2024), 1-10 

 

7 

public or state-owned banks into the sample could ease comparisons among firms, thereby augmenting the insights derived 

from this study. Furthermore, integrating a cross-country sample may offer valuable prospects for conducting meaningful 

comparisons. An additional constraint was relying solely on accounting-based indicators to assess FP. It could be beneficial 

to incorporate market-based metrics of performance. Subsequent research endeavors have the potential to address these 

limitations, extending and advancing the exploration in this domain. The exploratory nature of this study imposes 

limitations, and there is a need for subsequent research on a larger sample, preferably within a different financial sector. 

Additionally, conducting cross-country research would allow for comparisons of CG practices in Bangladesh with those in 

other nations. Extending this research to encompass diverse industry sectors in Bangladesh would enable an extensive 

comparison of the link between CG and FP. 

 

Implications for policy makers and managers 

In addition to enhancing and surpassing the existing comprehension of link between CG and FP, our results hold important 

managerial and decision-making implications. The effect of our research are particularly pertinent for both managers and 

policymakers. The research highlights the necessity of reinforcing governance measures related to the CEO chair in 

Bangladeshi private commercial banks. The involvement of institutional agencies in implementing CG changes should be 

considered. This study provides backing for modeling of a CG index by regulatory authorities. The broader investment 

community and individual companies, in particular, would gain reassurance for future investments through the 

implementation of CG policies and practices, fostering confidence among both investors and companies. The discovery that 

CEO duality adversely affects group-affiliated firms offers valuable insights for reform and intervention. A key policy 

implication from this study is that the unchecked authority vested in a single individual due to the dual role of the CEO 

could be harmful, particularly in the context of banks. The crucial finding is that influence of independent directors does 

not consistently differ among firms serves as a vital message for managers. It underscores the importance of including 

independent directors not just to fulfill numerical requirements, but for their effective oversight. This highlights the need 

for action at both the policy and firm levels. 

 
 

Author Contributions: Conceptualization, M.S.R.K., S.A., S.A. and M.G.S.H.K.; Methodology, M.S.R.K.; Software, M.S.R.K.; Validation, M.S.R.K., 

S.A., S.A. and M.G.S.H.K.; Formal Analysis, M.S.R.K., S.A., S.A. and M.G.S.H.K.; Investigation, M.S.R.K., S.A., S.A. and M.G.S.H.K.; Resources, 

M.S.R.K.; Data Curation, M.S.R.K.; Writing – Original Draft Preparation, M.S.R.K., S.A., S.A. and M.G.S.H.K.; Writing – Review & Editing, M.S.R.K., 

S.A., S.A. and M.G.S.H.K.; Visualization, M.S.R.K.; Supervision, M.S.R.K.; Project Administration, M.S.R.K.; Funding Acquisition, M.S.R.K., S.A., 
S.A. and M.G.S.H.K. Authors have read and agreed to the published version of the manuscript. 

Institutional Review Board Statement: Ethical review and approval were waived for this study, due to that the research does not deal with vulnerable 

groups or sensitive issues. 
Funding: The authors received no direct funding for this research. 

Acknowledgments: Not applicable. 

Informed Consent Statement: Informed consent was obtained from all subjects involved in the study. 
Data Availability Statement: The data presented in this study are available on request from the corresponding author. The data are not publicly available 

due to restrictions. 

Conflicts of Interest: The authors declare no conflict of interest.  
 

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