THE EFFECT OF BOARD AND AUDIT COMMITTEE ON FIRM PERFORMANCE

Abstract

Purpose: This paper has been constructed to measure the contribution of the Board committee and Audit Committee to the performance of the firms in the banking sector of Bangladesh. To measure firm performance indicators chosen were Tobin’s Q and Return on Assets and in terms of corporate governance variables regarding board composition and expertise were chosen to see how the makeup of the decision-makers of a firm changes the financial performance year to year and from bank to bank. Method: The sample consists of 30 listed banks from the Dhaka Stock Exchange expanding over the years 2016 to 2019. The research is mostly based on secondary data from relevant articles and research done around the world as well as data collection done through the respective annual reports of the subject banks. Data is interpreted through Correlation analysis and regression analysis to find the correlation between dependent and independent variables. Results: Audit committee meeting is highlighted to have a significant effect on the performance of the Banks. No other variables have a significant influence on firm performance. Implications: The research paper will add to the existing literature in the area of corporate governance and firm performance in Bangladesh. So that the effects of the Board and Audit Committee are better understood and implemented to better firm performance.