Abstract:
This research examines the influence of corporate governance practices on the financial
performance of private commercial banks in Bangladesh, using Return on Equity (ROE) as
the primary performance metric. In an era of increased regulatory oversight and stakeholder expectations, effective governance structures are recognized as critical drivers of bank
profitability and sustainability. The study focuses on four key governance variables: the
number of board meetings (BM), the presence of female directors (FD), the size of the board (BSIZE), and the presence of audit committee members (ACM). Using secondary data from four prominent private banks—Bangladesh Commerce Bank Ltd., Dhaka Bank, Dutch Bangla Bank, and Bank Asia—spanning the period 2019 to 2023, the study applies linear regression analysis to test the statistical significance of each governance variable in
explaining ROE. The results indicate that the frequency of board meetings and board size
have a positive and statistically significant impact on ROE. Conversely, the presence of
female directors shows a statistically significant but negative impact, suggesting challenges in
integration or underutilization. The presence of audit committee members, while essential in governance structure, showed no statistically significant influence on profitability. The
findings offer practical implications for bank executives, regulators, investors, and
policymakers. Boards need to not only comply with regulatory frameworks but also optimize governance practices to align with strategic financial goals. Enhancing governance quality through diverse, well-functioning boards and strategic oversight can directly contribute to improved bank performance and stakeholder trust.
