CORPORATE GOVERNANCE AND PROFITABILITY OF SELECT COMMERCIAL BANKS

Corporate Governance

The present paper purports to assess the impact of corporate governance practices on profitability of the banks. It is fact that good corporate governance always reflects on enhancement of profitability, increase the confidence levels of investors, shareholders and stakeholders, creation of conducive investment environment which is dire need of the day. In order to understand the governance practices referred to in this study, a discussion on the important aspects of corporate governance practices and firm performance is required. A banking institution is indispensable to a modern society. It occupies an important place in a nation’s economy and plays a pivotal role in the economic development of a country. It forms that core of the money market in an advanced country. To conclude Most of the existing governance framework is generally adequate and should remain intact. But the devil is in the details of implementation. A key priority is to increase the capacity of boards to oversee strategic risk taking and to accurately judge institutional performance. Improving board capacity will require upgrading the skills, experience, and leadership of nonexecutive directors and rebalancing the productive tension that should come with a high-performing board.

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