Adapting Corporate Governance for Sustainable Organizational Performance: A Case Study of the Banking Sector in Pakistan amid the COVID-19 Pandemic

Mohsin  Raza; Muhammad Amjad  Bilal; Allah Bakhsh Khan; Muhammad  Taqi

doi:10.62270/jirms.v4i2.59

Authors

Mohsin Raza Department of Management Sciences, TIMES Institute Multan, Pakistan https://orcid.org/0000-0002-7645-8830
Muhammad Amjad Bilal Department of Management Sciences, TIMES Institute Multan, Pakistan https://orcid.org/0009-0000-4938-1121
Allah Bakhsh Khan Department of Management Sciences, TIMES Institute Multan, Pakistan https://orcid.org/0009-0009-6738-0259
Muhammad Taqi Department of Management Sciences, TIMES Institute Multan, Pakistan https://orcid.org/0000-0002-5608-1140

DOI:

https://doi.org/10.62270/jirms.v4i2.59

Keywords:

Corporate Governance, CVOID 19 Pandemic, Return on Assets, Return on Equity, Earnings per share, GMM

Abstract

Purpose - Corporate governance is a crucial aspect of creating a corporate culture that emphasizes transparency, fairness, and openness. The COVID-19 pandemic has caused a global financial crisis, which has increased attention to corporate governance issues. In light of this, the objective of this study is to examine the impact of corporate governance on the sustainable organizational performance of the banking sector in Pakistan particularly in the context of COVID-19.

Study Design/Methodology/Approach - This research analyses the annual reports of sample banks and uses secondary data from 2016 to 2022; therefore, there is no doubt about the reliability and validity of the data. This study measured firm sustainable financial performance based on accounting data, using return on assets, return on equity, and earnings per share. The suggested model was investigated by the generalized method of moments through the Arellano-Bond Dynamic Panel-Data estimator.

Findings - The overall findings of the study reveal that corporate governance components such as board size, audit committee independence, number of board meetings, and chief executive officer duality have a significant impact on organizational performance. Furthermore, the Fixed Affect model indicates that CEO duality has no discernible effect on organizational sustainable performance, while board size, audit committee independence, and the frequency of board meetings all positively affect it.

Practical and theoretical implications- This study has implications for all stakeholders of the banking system, economic policymakers, and academicians by highlighting the importance of components of corporate governance that enhance overall organizational performance. Theoretically, compliance with corporate governance regulations should lower agency costs, which will improve the overall business's performance now and in the future.

Originality/Novelty- This study indicates that the use of corporate governance practices enhances and improves the overall sustainable performance of the banking sector. This study adds value to the existing body of literature by considering corporate governance and its association with organizational performance, particularly from the COVID-19 perspective.

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