ASSESSMENT OF CORPORATE GOVERNANCE PRACTICES & ITS IMPACT ON FINANCIAL PERFORMANCE: A CASE OF BANKING SECTOR OF PAKISTAN

Abstract

The primary aim of this study is to examine the impact of governance system on financial performance of various financial institutions, with a particular emphasis on banks. The data utilized in this quantitative research study was gathered from diverse sources, such as annual reports and other pertinent sources. Study's target population comprised of 34 scheduled banks listed in Pakistan, which are conventional in the nature and have numerous branches spread across country. Sample included both Islamic banks and conventional banks with Islamic windows. The research employed secondary data sourced from the annual reports of banks and financial institution websites. A dataset consisting of panel data covering a six-year period from 2018 to 2022 was gathered and analyzed using both the descriptive and inferential statistical methods. The findings of this study indicated that there is a significant effect of all observed corporate governance practices on financial performance of banks. This will aid them in creating & executing well-organized corporate governance structures that promote long-term performance and durability of financial institutions.