Ownership Structure, Board Characteristics and Firm Performance: Evidence from Bangladesh

Abstract

Using a panel of listed manufacturing companies in Bangladesh, this paper intends to empirically assess the relationship between firm-level governance mechanisms and firm performance using an integrated theoretical framework. For this purpose, data has been compiled from Dhaka Stock Exchange (DSE); and published yearly annual reports of particular organizations. The empirical findings of this paper shed light on the impact of ownership structure and board characteristics on its firm’s performance measure by the accounting rate of the return on assets. Although these results are in line with the majority of the literature, this model can still be examined using other proxy measures of firm performance and/or more years of observation. Findings of this study can be useful to managers, investors, and regulators, especially those who want to change their company’s ownership structure and board composition to increase its performance on the stock market.

Institutional ownership and board governance. A structured literature review on the heterogeneous monitoring role of institutional investors

“…Shareholders' investment decisions are linked with considerations of risk and return (Velte and Obermann, 2021). As institutional investors are primarily focused on financial results and investment risks from a traditional perspective, many studies found a positive impact of IO on financial performance (Almusattar and Teker, 2020;Salameh et al, 2023). In detail, IO decreases information asymmetry on capital markets (Shiri et al, 2016), financial statement fraud (Jain, 2022) and financial flexibility (Salehi et al, 2016).…”