Accounting
Raihan Sobhan; Muntaqim Chowdhury
Abstract
The main purpose of the research is to determine the factors that influence agency costs in listed non-bank financial institutions of Bangladesh. The following eight factors have been considered in this study: board size, percentage of independent directors, and percentage of female directors under board ...
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The main purpose of the research is to determine the factors that influence agency costs in listed non-bank financial institutions of Bangladesh. The following eight factors have been considered in this study: board size, percentage of independent directors, and percentage of female directors under board characteristics; percentage of managerial ownership, institutional ownership, and foreign ownership under ownership structure; and leverage and firm size under firm characteristics. To measure agency costs, the asset utilization ratio (AUR) and expense ratio (ER) have been used as proxies. The regression results demonstrate that board size, institutional ownership and leverage are all inversely and significantly associated to agency costs, but managerial ownership has a significant and positive relationship. On the other hand, no significant relationship has been found among the percentage of independent directors, female directors and firm size with agency costs. However, the nature of the relationship between the percentage of foreign ownership and agency costs could not be generalized. The findings of this study will assist financial institution executives in Bangladesh in understanding the existing factors that influence agency costs and will help them in reducing agency costs by identifying and addressing the causes.
Accounting
Raihan Sobhan
Abstract
The main objective of this study is to find out the effects of board characteristics on firm performance in the listed companies of non-banking financial institutions industry of Bangladesh. This study has considered five board characteristics namely board size, the proportion of independent directors, ...
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The main objective of this study is to find out the effects of board characteristics on firm performance in the listed companies of non-banking financial institutions industry of Bangladesh. This study has considered five board characteristics namely board size, the proportion of independent directors, the proportion of female directors, the number of board meetings and percentage of directors’ ownership. ROA has been taken as the performance indicator. The regression results show that board size and female directors are positively and significantly related to firm performance. On the other hand the proportion of independent directors, the number of board meetings and the percentage of directors’ ownership do not have any significant impact on firm performance. The findings of this study will help the regulators and policymakers to understand the existing weakness of corporate governance structure in the financial institution industry and will aid in their quest for harmonizing the practice of corporate governance of Bangladesh with that of developed countries.