EFFECT OF CORPORATE GOVERNANCE ON ORGANIZATIONAL PERFORMANCE: AN EMPIRICAL STUDY OF NEPALESE COMMERCIAL BANKS

Abstract

There is no any doubt that corporate governance intended to well and effective functioning of enterprises incorporating the interest of all the stakeholders equally leading to better organizational performance. The major objective of this research is to explore the effect of corporate governance in the organizational performance of Nepalese commercial banks. To address the study objective, it has used descriptive and analytical research design. The study has taken 175 banking staffs of five commercial banks of Nepal as the respondents. The construct reliability of this study is greater than the cut-off level 0.7 of Nunally (1978). This study found that Nepalese banking staffs are more committed towards their work and satisfied with the practice of corporate governance in their respective banks. It shows that all study variables are positively related with each other. Among independent variables; transparency & disclosure and auditing & compliance of law have stronger positive relation with dependent variables; financial and non-financial performance of organization. This study concludes that there is significant impact of corporate governance on organizational performance in Nepalese banking industries and it plays an important role in improving the overall organizational performance.