Impact of Corporate Governance Exerted by Board of Directors on Performance of Commercial Banks of Pakistan (Study Carried out on Prominent Commercial Banks of Rawalpindi)

Abstract

The corporate governance mechanisms in Pakistan are in most instances thought to be less important to achieve good organizational performance. By enduring the good corporate governance exerted by BODs, organizations may increase the circumstances where management can convince the employees particularly and shareholders generally to obtain long term organizational gains. We used five point likert scale questionnaire to measure the corporate governance in banking sector of Rawalpindi, Pakistan. This empirical study suggests that the corporate governance by board of directors has widespread role in organizational performance. The results suggest that independence and accountability have significant effect on organizational performance. However, effect of independence is higher than accountability. Moreover, our study shows that transparency do not effect on organizational success significantly.

Keywords: corporate governance, transparency, independence, accountability, board of directors and organizational performance.