Bank Performance and Board of Directors’ Characteristics in The Context of Bangladeshi Islami Banks
The aim of this paper is to observe the relationship between board structure (covering CEO role dualism and composition, board organization, board size), social contribution, investment account holder (IAHs) and the banks performance focusing on Islamic banking, one of the rapidly-growing industries. By applying data from 6 Islamic banks operating in Bangladesh, over the period of 2007 – 2017, a generalized least square regression model was used to investigate such relationship. The result indicates that, independence of chairman has a positive impact on bank performance. In contrast, both size and composition of the board have a negative impact on bank performance. However, IAHs and the separation of CEO have no impact. Considering the control variables, leverage has a negative and bank size has a positive impact on bank performance. On bank performance, gross domestic product and Zakah has no significant impact. The results recommend that, through the board of directors (BODs), whereby decisions made by the BODs would lead to greater investors’ confidence in the market, Islamic banks should enrich the efficiency of CG to yield a better bank performance. The sample size could be increased by including Islamic banks operating in South Asian Association for Regional Cooperation (SAARC) in future research since the current sample size is very small.
Key words - Board structure, Social Contribution, Bank Performance, Islami Banks