Abstract:
Corporate governance has become a key topic of study due to its viability in business modeling. During last recent years a lot of research work has been conducted to focus impact of corporate governance and its performance in various market structures. This research was mainly focused on the proposed hypothetical model to explore the association between the corporate governance and firm performance of banking sector in Pakistan, while observing the corporate social responsibility in moderating role. Sample population consists of 14 banks and data collection was done through convenience sampling technique. This research was carried out to study the relationship of corporate governance with firm performance with moderating role of corporate social responsibility of the banks operating in Pakistan. Main objective of this study was to be aware of the corporate governance and corporate social responsibility and their impact on the performance of the banks of Pakistan. Today’s it’s a challenge to forecast the Pakistani economy and to minimize the risks by adopting important measures to save the bank’s profitability. Three independent variables, two dependent variables and one moderating variable has been used to measure the impact of corporate governance on bank’s financial performance. These three independent variables are proportion of executive directors, proportion of top twenty stakeholders and proportion of managerial ownership, while the firm performance has been measured on the basis of two measures ROE and ROA. The data for evaluation was collected from 14 commercial banks of Pakistan for the period of 2012-2017. This study evaluates descriptive statistical analysis, correlation and regression analysis to evaluate the effect of corporate governance factors on the firm performance of the banks with the moderating role of corporate social responsibility. It was found that corporate governance factors (managerial ownership and top twenty stakeholders) have significant impact on ROA while corporate social responsibility has also significant impact on ROA and ROE. This research has been aimed to provide repercussions for firms by throwing light on the potential means of focusing firm performance. This research will provide practical grounds for other firms to adopt the ways in order to improve firm performance. The importance and implementation of corporate governance in order to enhance firm performance with moderating role of corporate social responsibility.
