Impact of Corporate Govermance Code of Conduct on the performance of Commercial Banks in Pakistan

Abstract

The Research has been carried out to find the impact of Corporate Governance Code of Conduct implemented by State Bank of Pakistan in the year 2002 to improve the performance of Commercial Banks in Pakistan. The performance of Commercial banks has been evaluated through questionnaire developed in accordance with the code of conduct issued by SBP & through financial indicators which include: profit before tax, deposits, advances, investment, return on equity, return on asset, earning per share, total asset and price earning ratio before and after the implementation of the code of corporate governance in Pakistan. The research investigates how corporate governance has affected performance of Commercial Banks in compliance with Corporate Governance code of conduct & also using financial statements of commercial banks in Pakistan for the period 2000-2004. A questionnaire was developed and filled up by the bank managers to assess the impact of corporate governance on the performance of Commercial Banks. The Banks have been selected keeping in view that they are the major players in the banking industry. It has been seen that corporate governance procedures applied in the banking sector in Pakistan have been effective and through our findings of questionnaire we came to the conclusion that there has been improvement in the performance of Commercial Banks.