THE EFFECT OF BOARD CHARACTERISTICS & CSR ON BANK PERFORMANCE

Abstract

This report analyzes the effects of board characteristics and CSR on bank performance. The elements of the board characteristics are board size, board expert/professional, board meeting, board independence and CEO duality. For the element CSR, CSR expenditure has been used. To find out the profitability, Tobin’s Q and NIBT are used. Data from listed 25 banks in Dhaka Stock Exchange (DSE) from the year 2018 to 2022 have been used to conduct the study. Also, seven articles on the effect of board characteristics on bank performance have been used, as well as seven articles on the effect of CSR on Bank performance to justify the report further. The results of this study suggest that board meeting frequency, board expertise, board independence, and CEO duality have a significant positive relationship with Tobin’s Q. However, board size has a significant negative relation with Tobin’s Q. On the other hand, board size and board independence have significant negative relation with NIBT. It is found that two independent variables i.e. board expertise and CEO duality has significant positive relationship with NIBT. The other variable, CSR has significant negative association with Tobin’s Q but has a significant positive association with NIBT. The purpose of this report is to examine the connection between bank performance, CSR initiatives, and board characteristics. It specifically looks at how a bank's profitability—as determined by Tobin's Q and Net Interest Before Tax (NIBT)—is impacted by the structure and decision-making of the board, including board size, frequency of meetings, expertise, independence, and CEO duality. It also looks into possible trade-offs between maximizing profit and social responsibility, as well as the effect of Corporate Social Responsibility (CSR) spending on bank profitability.