Abstract:
The purpose of this study is to evaluate the impact of SSB characteristics on firm performance. Proxy variables for SSB characteristics are board independence and SSB frequency of meetings, however firm performance is measured by market based indicators (EPS) and accounting based indicators (ROA, ROE). Regression model finalized on the basis of hausman test. With respect to control variables, this paper analyzed the literature and found many control factors that may have an effect on results. These included leverage (Beltratti & Paladino, 2015), bank age (Majumdar, 1997), and size of bank (Hadriche, 2015).The population of this sample comprises all banks controlled by the State Bank of Pakistan. There are 45 banks that are supervised by the SBP. This involve public sector banks, commercial banks, Islamic banks, international banks and micro-finance institutions / banks. The analysis study consists of Islamic banks as a sample, which are controlled by the State Bank of Pakistan.On the basis of Fixed Effect Model empirical analysis in this research work explicitly shows that there is a positive significant relationship between SSB independence and firm performance measured by accounting and market based measures. Similarly, frequency of meetings also depicted a positive significant relationship with firm performance measured by accounting-based and marketing based variables. For future studies, it is recommended to extend the framework by incorporating new variables. The future study may include financial performance based indictors like, net interest margin ratio, return on capital employed (ROCE), return on revenue (ROR) etc. as well as market-based indicators like., long-run marginal expected shortfall (LRMES), market-based capital ratio (MBCR). In future studies, comparative analysis of different Islamic banks from different countries can serve as worthwhile contribution in literature. Islamic banks of other countries should be taken in the sample. In case of Pakistan, at least 20 years data must be analyzed in upcomi0ng research work for more reliable results.
