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CORPORATE GOVERNANCE AND FIRM PERFORMANCE: A STUDY ON FOOD AND ALLIED COMPANIES

Md. Salah Uddin , Md. Abu Toha , Md. Asiqur Rahman and Mallika Saha

Abstract

The purpose of the paper is to assess relationship between corporate governance and the performance of firms on Food and Allied companies in Bangladesh. In this study, corporate goverance is considered to consist of the following elements : (i) board size; (ii) presence of female board members; (iii) duality of the chief executive officer (CEO); (iv) education level of board members; (v) board working experience; (vi) independent directors; (vii) board ownership; and (viii) CEO’s tenure. correllation matrix for testing hypothesis is used on 18 listed Food and Allied companies during the period of 2014-2015. It is found that board size, presence of female board members, education level of board members, board age, independent directors and CEO tenure are negatively correlated with Return on Assets (ROA). However, duality of the CEO and board ownership are positively correlated with ROA. In contrast, board size, presence of female board’s members, board working experience, independent directors and CEO tenure are found negatively correlated with return on equity (ROE). However, duality of the CEO, education level of board members, board ownership are found positively correlated with ROE. This study aims to reflect the gap in terms of firm’s performance in the absence of proper governance.