Board independence and firm performance: evidence from Bangladesh

Rashid, Afzalur (2018) Board independence and firm performance: evidence from Bangladesh. Future Business Journal, 4. pp. 34-49.


Abstract

This study examines whether board independence influences firms’ economic performance among listed firms in Bangladesh. By using data from 135 listed firms on Dhaka Stock Exchange and by using accounting and market performance measures, this study uses simultaneous equation approach to control the potential endogeniety problem. This study finds that, board independence and firm economic performance does not positively influence each other. This study also finds that, board size has significant positive influence on both board independence and firm performance. These findings raise the questions of whether ‘one size fits all’ type corporate governance practices can be exercised around the world. Bangladesh has imitated the requirement of having outside directors sit on corporate boards to make corporate boards independent and accountable, ignoring the underlying institutional differences. While board independence is an important attribute of corporate board practices in many developed countries, board independence still may be an illusion in Bangladesh.


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Item Type: Article (Commonwealth Reporting Category C)
Refereed: Yes
Item Status: Live Archive
Additional Information: Permanent restricted access to Published version in accordance with the copyright policy of the publisher.
Faculty/School / Institute/Centre: Current - Faculty of Business, Education, Law and Arts - School of Commerce (1 July 2013 -)
Faculty/School / Institute/Centre: Current - Faculty of Business, Education, Law and Arts - School of Commerce (1 July 2013 -)
Date Deposited: 28 Feb 2020 05:49
Last Modified: 27 Mar 2020 04:59
Uncontrolled Keywords: agency theory, Bangladesh, board independence, CEO, power, stewardship theory
Fields of Research : 15 Commerce, Management, Tourism and Services > 1501 Accounting, Auditing and Accountability > 150106 Sustainability Accounting and Reporting
Socio-Economic Objective: E Expanding Knowledge > 97 Expanding Knowledge > 970115 Expanding Knowledge in Commerce, Management, Tourism and Services
Identification Number or DOI: 10.1016/j.fbj.2017.11.003
URI: http://eprints.usq.edu.au/id/eprint/37855

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