Governance and the double-bottom-line performance of microfinance institutions: evidence from Bangladesh

What is it about?

In this paper, we show that the presence of stakeholders on board plays a critical role in the microfinance industry. Particularly, board size, board independence, and CEO duality have a significant influence on both financial and social performance. Our findings uphold the underline propositions of stewardship and stakeholder theories. The use of a multi-theoretical approach in this study is certainly important because we argue that the governance practices and elements are different in a developing country, like Bangladesh. Hence, our evidence suggests a multi-stakeholder engagement is crucial in Bangladesh, and perhaps in other developing nations to ensure sustainable dual performance in microfinance institutions (MFIs). Our findings are insightful for the readers and resourceful for the policymakers.

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