Role of Corporate Governance on Profitability of Non-Banking Financial Institutions in Bangladesh: A Study on Listed ‘A Category’ Firms

Abstract

Corporate governance is a key component in this modern era for organizations’ success since the concept requires firms to consider all the stakeholders’ interests. For banking and non-banking financial institutions, adherence to good corporate governance might reduce irregularities and mismanagement increasing accountability, transparency, and profitability. This study is designed to determine the significance of the corporate governance factors of board size, board independence, board remuneration, executive remuneration, and shareholding concentration on the profitability (ROE and ROA) of the ‘A Category’ NBFIs in Bangladesh. The findings made through regression and correlation analysis, were inconclusive, having only board size and shareholding concentration being significant and decisive. The originality of the study lies in the duration (2015-2022) and having ‘Shareholding Concentration’ as an independent variable to correlate with profitability.