Corporate Governance and Efficiency in Nepalese Commercial Banks

9 Pages Posted: 18 Oct 2012

See all articles by Ravi Prakash Poudel

Ravi Prakash Poudel

University of New England (Australia)

Martin Hovey

UNE Business School

Date Written: October 17, 2012


The 1997-1998 economic crises in the Asian countries highlighted the importance of corporate governance. In developing countries such as Nepal, a good governance of banks is crucial for the survival of its economy. This study investigates the impact of corporate governance on efficiency of Nepalese commercial banks. Corporate governance variables are represented by board size, independence and diligence, Audit Committee size, independence and diligence and ownership structure. The non-performing loan variable is used for bank’s efficiency. The regression analysis is used to examine the relationship between corporate governance and efficiency of bank. The findings show that bigger board and audit committee size and lower frequency of board meeting and lower proportion of institutional ownership lead to better efficiency in the commercial banks.

Keywords: corporate governance, commercial bank, board, audit committee, ownership structure, efficiency, Nepal.

JEL Classification: G20, G21, G30, G32

Suggested Citation

Poudel, Ravi Prakash and Hovey, Martin T., Corporate Governance and Efficiency in Nepalese Commercial Banks (October 17, 2012). Available at SSRN: or

Ravi Prakash Poudel (Contact Author)

University of New England (Australia) ( email )

Armidale, New South Wales 2351

Martin T. Hovey

UNE Business School ( email )

Armidale, NSW 2351

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