The Role of Corporate Governance and its Significance on the Share Price Movements of Banking Financial Institutions Listed on DSE

Abstract

The rationale of this study was to ascertain how corporate governance affected the fluctuations in share price of Dhaka Stock Exchange listed banking financial organizations. Companies must instantly release new price-sensitive information via official news outlets, requiring Bangladeshi stock market regulations. The research investigates the connection between changes in share price and corporate governance. Additionally, it assesses the effectiveness of a company's framework for effective corporate governance, the equal treatment under the law of shareholders, the participation of stakeholders in corporate governance, transparency and disclosure, and the board of directors' accountability. To confirm the data quality, descriptive statistics were calculated for all variables. Primary and secondary data were used in this investigation. The main approach utilized to determine the interaction between the dependent and independent variables was regression. The analysis revealed that shareholder rights and significant ownership responsibilities had a negative but minimal impact on share price, while company's board of directors, an effective framework for corporate governance, and the role of stakeholders in corporate governance all had a significant and positive effect on share price. The study has laid a foundation for the management of publicly traded companies to aim for an ideal board of directors for their companies in order to boost the value of their companies, resulting in higher share prices.