Board Independence, Risk Management and Financial Performance of Financial Institutions in Bangladesh

Abstract

The main purpose of this study is to examine the relationship of board independence with Risk Management and Financial Performance of listed Financial Institutions in Bangladesh. This study considers 53 financial institutions listed in Dhaka Stock Exchange with the data of year 2014. Results of this research show that the relationships of board independence with risk management and financial performance of financial institutions are insignificant. These findings suggest the possible inefficient role of independent directors of the financial institutions for better risk management and financial performance. The important implications of this study is to enhance the understanding of policy makers, regulators and managers about the role independence directors in improving the performance of financial institutions in Bangladesh which, in turn, assists them to set appropriate rules and regulations to improve the efficiency of independent directors as well as the overall corporate governance practices in Bangladesh.