Adherence to the principles of good corporate governance serves to foster investor confidence and attract domestic as well as foreign investors. Companies operating on the principles of good corporate governance are able to attract investment. A study conducted by McKinsey quarterly indicated that investors would be willing to pay as much as 30 percent more for shares in companies having effective corporate governance.
A number of surveys of investors in Europe and the US support the same findings and show that investors eventually reduce their investments in a company that practices poor governance. Why corporate governance matters for banks? The need for corporate governance in Pakistan is unmistakable. The country has steadily responded to the corporate governance challenges and progress in the banking sector is particularly impressive.