The Impact of Nomination and Remuneration Committees on the Financial Performance of Insurance Companies in Bangladesh | Chapter 7 | Business, Management and Economics: Research Progress Vol. 8

Insurance companies play a crucial role in the economic development of a country by providing financial protection, facilitating risk management, and fostering long-term investments. In Bangladesh, the insurance sector presents significant growth potential, driven by the country's dynamic economic landscape, an expanding middle class, and increasing awareness of financial security. To achieve sustainable growth, the sector must prioritize enhancing public awareness, strengthening the governance structure, diversifying product offerings, and embracing digital transformation. By implementing appropriate strategic initiatives, the insurance industry can emerge as a vital component of Bangladesh's evolving financial framework. The establishment of a nomination and remuneration committee as a fundamental aspect of corporate governance, is essential for upholding the principles of fairness, impartiality, and transparency within organizations. This commitment not only bolsters stakeholder’s confidence but also enhances overall business performance. This study investigates the relationship between a firm's financial performance and its nomination and remuneration committee (NRC). As delineated in the methodology section, the statistical software STATA was employed to analyze the correlation between the independent and dependent variables in this study. The dataset comprised 48 insurance firms listed on the Dhaka Stock Exchange over the period 2015 to 2022, resulting in a total of 384 firm-year observations. The results indicate a statistically significant positive relationship between the financial measures (EPS, ROE) and the independent variable (NRC), with the exception of ROA, which is not statistically significant. This investigation seeks to address a gap in the existing literature by examining companies' financial performance within the emerging insurance sector of Bangladesh. The study concludes by suggesting that further investigation and research in this area is warranted, indicating that there are additional aspects to explore regarding the relationship between financial performance and NRC in the insurance sector in Bangladesh.

 

Author (s) Details

 

Tanzina Haque
Department of Accounting & Information Systems, University of Dhaka, Bangladesh.

 

Please see the book here:- https://doi.org/10.9734/bpi/bmerp/v8/2888