Managers’ Background and the Financial Performance: An Empirical Study on the Companies Listed in Dhaka Stock Exchange

Researchers argue that management capability directly influences the financial performance of the companies given that other factors remain the same (Hudson, 2001). This is because a team of efficient managers can design and implement their business strategy to meticulously exploit the competitive advantages of the firm, which leads to sustainable financial performance and business growth (Matheson, 2003). This academic argument regarding the financial performance and management capability is valid from the theoretical point of view, but we need to examine its empirical validity in order to identify the factors that proxies the management capabilities and their impact on the financial performance of firms. This study found, using a sample of 125 companies listed on the Dhaka Stock Exchange, that the experience and education of management and the business background of the promoters have significant impact on the level of financial performance measured by Altman Z score (Altman,1968 and 1984).