Abstract:
The main objectives of this study are to find out the relationship between corporate governance and banking
performance and also find out the impact of corporate governance on banking performance. This study focused
on four aspects of corporate governance namely; Board Size (BS), Board Diversity (BD), Outside Directors
Percentage (OSDP) & Board Meeting Frequency (BMF). Banking performance has been measured through
Return on Equity (ROE) and Return on Assets (ROA). The results revealed that all variables of corporate
governance are positively correlated with ROE in state banks as well as, in private banks except BD and BMF
other variables have strong negative relation with ROE, which is significant at 5percent level of significance.
Similarly, except BMF other variables have negative relationship with ROA in state banks. Private Banks also
show same relation except the variable BD. BD have strong negative relationship with ROA in state banks which
is significant at 5 percent level of significance, but in private banks; positive relationship is denoted by BD
which is not significant. Further corporate governance has a moderate impact on performance of both private and
state banks.
