BOARD MEETING FREQUENCY AND PERFORMANCE OF PUBLIC SECTOR BANKS IN INDIA

Abstract

This paper aims to analyze the effect of the frequency of board meetings on the performance of public sector banks in India. According to agency theory, frequent board meetings may lead to more concentrated monitoring, lowers the agency cost, contributes to more exchange of ideas among the board of directors, and assist them to be more equipped with the information, which ensures better financial performance. This paper investigates this assumption of agency theory on the performance of public sector banks in India. The number of committees, frequency of board meetings, and audit committee meetings are a proxy of corporate governance mechanisms. Return on Assets (ROA) is a proxy of financial performance. The duration of the study is 2015-2019, and secondary data is used. Panel regression is employed to analyze the impact of variables of corporate governance mechanisms on the performance of public sector banks. Our results find no significant impact of any governance variables used in the study on the ROA of the banks. The study makes an original contribution by providing a comprehensive study related to the process and activity of the board and its impact on the performance of banks. The findings of this paper will help examine the board's process and lead to improvement in concern.