Corporate Governance and Firm Financial Performance: Do Ownership and Board Size Matter?

Corporate governance is considered as environment of trust, set of processes, policies and laws affecting the way corporations are administrated and directed. The previous literature in context of the corporate governance relationship with firm financial performance shows controversial findings; similarly literature shows lack of studies in context of developing countries as Pakistan. Therefore, this research explores the relationship of the corporate governance and the firm financial performance in context of developing country as Pakistan. The data has been collected from the sugar sector listed in KSE (Pakistan Stock Exchange), 20 corporations are selected as sample from sugar sector on basis of outstanding shares. Corporate governance taken as independent variable and measured as CEO biformity (CB), board size (BS), firm age (FA), firm size (FS). Financial performance of firms taken as dependent variable and measured as return on asset (ROA), return on equity (ROE), net profit margin (NPM). Data is collected for period of 2000-2013 from reports of the sugar companies listed in KSE (Pakistan Stock Exchange) issued annually and analysis of balance sheet given by State Bank of Pakistan (SBP). Result shows that CEO biformity significantly affecting firm financial performance. Board size (BS) shows partially significant impact on firm financial performance. Firms age (FA) show partially significant impact on firm financial performance. Firm size (FS) shows partially significant impact on firm financial performance. Therefore, conclusion has been drawn based on the results of analysis that this study adds new knowledge to the existing body of knowledge of corporate governance impact on firm financial performance and in context of developing countries as Pakistan. Keywords: Corporate governance, firm financial performance, sugar sector, Pakistan.

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The Impact Of Corporate Governance on The Financial Performance in Malaysia

UNIMAS Review of Accounting and Finance ◽

10.33736/uraf.3551.2021 ◽

2021 ◽

Vol 5 (1) ◽

pp. 41-58

Author(s):

NURFATANAH ABDULLAH

Keyword(s):

Corporate Governance ◽

Financial Performance ◽

Firm Size ◽

Audit Committee ◽

Committee Meeting ◽

Board Size ◽

Firm Financial Performance ◽

Normality Test ◽

Lm Test ◽

The Impact

The aim of this study is to investigate the relationship between corporate governance and firm financial performance in Malaysia. This study is mainly focusing on four sections of corporate governance which are board independent, board size, the frequency of audit committee meeting and firm size. The population of this study is Top 30 firms in Malaysia that are public listed in Bursa Malaysia while for the period, this study focusses on year 2016 to 2019 which is 4 years. This study uses Return on Assets (ROA) to measure the firm effectiveness and efficiency. As for statistical analysis, this study uses E-View to run all the test such as Breusch-Godfrey Serial Correlation LM Test, Hausman Test, Ordinary Least Squared (OLS) method, Autocorrelation, Multicollinearity and Normality Test. According to the results of the analysis, board independent has positive insignificant relationship with firm performances while board size and firm performances have negative and insignificant relationship. As for the frequency of audit committee meeting and firm size, the results display that both variables have negatively significant relationship with the performances of the firm. Apart from that this study use two theory which are Prospect Theory and Agency Theory.

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Board Structure and Firm Performance:Evidence from Emerging Market

International Journal of Recent Technology and Engineering - 2 ◽

10.35940/ijrte.e4834.018520 ◽

2020 ◽

Vol 8 (5) ◽

pp. 2305-2311

Keyword(s):

Corporate Governance ◽

Firm Performance ◽

Financial Performance ◽

Corporate Performance ◽

Emerging Market ◽

Small Sample ◽

Independent Director ◽

Board Structure ◽

Board Size ◽

Firm Financial Performance

This paper fulfils the purpose by studying the effect of corporate board structure i.e., board size and independent director on firm financial performance for selected focused and diversified Indian companies. This study analyses the corporate governance structure of 76 Indian companies (60 focused and 16 diversified companies) listed on the BSE-Sensex for ten years from the year 2007-2016 using panel data analysis. The empirical findings showed a positive relationship of board size with firm performance and significant negative association of independent director with the corporate performance of focused Indian firms, while in the diversified Indian firm, board size found to be positively related to financial performance and independent director found to be negatively related to corporate performance. The result has shown that board structure has seemed to be significant in listed focused firm with firm performance while board structure of diversified firm seems to be insignificant with firm performance, it might be because of small sample size and dynamics of an emerging economy in India which is different from the developed economies of the world. This study implied that in emerging or developing economy like India, lower independent director usually boost company value, and adequate board size will significantly impact on firm performance both in case of focused and diversified firms. This research paper contribute and fill existing gap in literature on corporate governance by examining and establishing relation between firm performance and board structure with focused and diversified Indian firms.

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Corporate governance, ownership structure and firms’ financial performance: insights from Muscat securities market (MSM30)

Journal of Financial Reporting and Accounting ◽

10.1108/jfra-05-2020-0130 ◽

2021 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Abdelbaset Queiri ◽

Araby Madbouly ◽

Sameh Reyad ◽

Nizar Dwaikat

Keyword(s):

Corporate Governance ◽

Firm Performance ◽

Financial Performance ◽

Board Of Directors ◽

Ownership Structure ◽

Securities Market ◽

Board Size ◽

Content Type ◽

Firm Financial Performance ◽

Individual Ownership

Purpose The purpose of this study is to investigate the relationship between selected board characteristics and ownership elements and the performance of firms listed in the Muscat Securities Market (MSM30). The examination focused on how the firm financial performance was affected by the board size, the number of board meetings and the ratio of the independent board of directors along to the ownership concentration types (i.e. institutional, state and concentrated individual ownership). Design/methodology/approach Data were extracted from the annual reports available online on the MSM30 website over a period of seven years (2009–2015). The sample consisted of 14 firms belonging to the non-financial sector. The data were of a balanced type and there were 98 observations. The analysis was conducted using the ordinary least square in STATA with the use of the robustness technique of standard error. Findings The findings of this study provide evidence that the selected elements for board characteristics and ownership influence firm performance. Nevertheless, such influence has its interpretation that differs to some extent from other securities markets in the developing countries. For instance, the ratio of the independent board of directors, the number of board director’s meetings, state ownership and concentrated individual ownership were inversely affecting the firm performance. However, institutional ownership and board size were found to have a positive effect on firm performance. Originality/value Studies on the influence of corporate governance and ownership structures in the context of Oman are still scarce. MSM30 received little attention, even though such an index encompasses the most liquid and the most profitable firms. MSM30 is an important index for investors in Oman looking for capital gains. Accordingly, this present study contributes to the knowledge body by providing new findings related to Oman and compares it with the other markets within Gulf Council Countries (GCC) and around the world. This will provide more understanding of the Omani context. Moreover, the authors anticipate that the outcomes of this research, which so far is the most comprehensive study in the Omani context in terms of the impact of corporate governance and ownership structure on firm financial performance can significantly shape corporate governance discourse, practices and policies in Oman, in particular, and in other GCC countries in general, to improve financial performance and corporate sustainability.

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Impact of Corporate Governance on Firm Financial Performance in Islamic Financial Institution

International Letters of Social and Humanistic Sciences ◽

10.18052/www.scipress.com/ilshs.51.106 ◽

2015 ◽

Vol 51 ◽

pp. 106-110 ◽

Cited By ~ 1

Author(s):

Najeeb Haider ◽

Nabila Khan ◽

Nadeem Iqbal

Keyword(s):

Corporate Governance ◽

Financial Performance ◽

Audit Committee ◽

Positive Relationship ◽

Banking Sector ◽

Financial Institution ◽

Annual Reports ◽

Islamic Banking ◽

Board Size ◽

Firm Financial Performance

The paper discusses the influence and relationship between corporate governance practices and firm financial performance in Islamic banking sector. Main purpose of this study is to find or identify various factors or variables that affects the firm financial performance. Corporate governance focuses on three meters as board size, number of meeting and audit committee size and firm financial performance has also three indicators return on equity, return on asset and earning per share. Data relates to corporate governance and firm financial performance is collected from annual reports of different Islamic banks to analyze the results. Data reveals the positive relationship between corporate governance and financial performance of Islamic banking sectors. The most outstanding results of this study has considerable and strong positive relationship in large board size and firm financial performance in developing countries as Pakistani circumstances.

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The relationship between board characteristics and firm financial performance in Malaysia

Corporate Ownership and Control ◽

10.22495/cocv14i1c1p9 ◽

2016 ◽

Vol 14 (1) ◽

pp. 259-268 ◽

Cited By ~ 1

Author(s):

Sin Huei Ng ◽

Boon Heng Teh ◽

Tze San Ong ◽

Wei Ni Soh

Keyword(s):

Corporate Governance ◽

Financial Performance ◽

Voluntary Disclosure ◽

Random Effect ◽

Board Size ◽

Return On Equity ◽

External Auditors ◽

Board Characteristics ◽

Firm Financial Performance ◽

The Relationship

Corporate governance has drawn attention of investors and government after the incidence of financial crisis world- wide since the late 90’s. Despite that reforms of corporate governance have been in place in Malaysia, voluntary disclosure of corporate governance has yet to proof its impact on the financial performance of the companies. This study examines the relationship between corporate governance attributes and firm financial performance in Malaysia. The relationship between board characteristics (board tenure, board size and CEO duality) were analyzed to investigate their correlation with firm financial performances. A total of 100 public listed companies were randomly selected from Bursa Malaysia for the year 2009 to 2013. Random effect panel data regression was obtained by using Stata. This study finds that board size, board tenure were significant to Return on Equity (ROE) and Return on Assets (ROA). However, firm size has no significant relationship with firm financial performance. It is recommended that apart from including more variables as controlling effects on firm financial performance and examining few industries as sample, it is also good to examine the correlation between board characteristics and corporate governance variables (foreign listings, equity analysis, external auditors, leverage ratios, dividend policy, etc.) on one hand, and ownership structures on the other hand, that have significant impact on firm financial performance.

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Impact of Corporate Governance on Financial Performance: Karachi Stock Exchange, Pakistan

Business and Economic Research ◽

10.5296/ber.v6i2.9772 ◽

2016 ◽

Vol 6 (2) ◽

pp. 401 ◽

Cited By ~ 1

Author(s):

Aon Waqas Awan ◽

Javed Ahmed Jamali

Keyword(s):

Corporate Governance ◽

Financial Performance ◽

Audit Committee ◽

Stock Exchange ◽

Profit Margin ◽

Audit Committees ◽

Board Size ◽

Good Decision ◽

Return On Equity ◽

The Impact

The aim of the research is to understand the impact of corporate governance on financial performance of listed companies on Karachi Stock Exchange Pakistan. Data was collected from forty two companies from different sectors like, insurance, banking, investment banking, and sugar industries. Study includes variables like profit margin & return on equity as a dependent (profitability) and board size, audit committee, annual general meetings & chief executive office (corporate governance). Using Pooled OLS, the result of the study proved those board size and audit committees have positive relationship with Profit margin and Return on Equity, if any independent variable changes it also stimulus the positively changing impact on Return on Equity (ROE) and Audit Committee (AC). This research offers imminent guidelines to the policy and decision makers in any type of firms to take good decision to set their firms hierarchy system.

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TATA KELOLA DAN KINERJA KEUANGAN BADAN USAHA MILIK NEGARA (BUMN) GO PUBLIC PERIODE 2014-2018

Nominal Barometer Riset Akuntansi dan Manajemen ◽

10.21831/nominal.v10i1.32792 ◽

2021 ◽

Vol 10 (1) ◽

pp. 82-101

Author(s):

Andika Dwi Pradito ◽

Axel Giovanni ◽

Devi Wahyu Utami

Keyword(s):

Corporate Governance ◽

Linear Regression ◽

Financial Performance ◽

Empirical Evidence ◽

Audit Committee ◽

Stock Exchange ◽

Analytical Tool ◽

Board Independence ◽

Government Ownership ◽

Board Size

Abstrak: Tata Kelola Dan Kinerja Keuangan Badan Usaha Milik Negara (BUMN) Go Public Periode 2014-2018. Penelitian ini bertujuan untuk memberikan bukti empiris mengenai pengaruh tata kelola perusahaan terhadap kinerja keuangan Badan Usaha Milik Negara (BUMN) yang terdaftar di Bursa Efek Indonesia (BEI) selama periode 2014-2018. Sampel penelitian yang memenuhi kriteria berjumlah 12 Badan Usaha Milik Negara (BUMN). Alat analisis yang digunakan adalah regresi linear. Hasil penelitian memberikan bukti mengenai urgensi komite audit dalam tata kelola perusahaan. Penelitian ini juga menunjukan bahwa board size, board independence serta kepemilikan pemerintah tidak memiliki peran dalam menjelaskan variabilitas kinerja keuangan Badan Usaha Milik Negara (BUMN).Kata kunci: Badan Usaha Milik Negara (BUMN), kinerja keuangan, tata kelola perusahaanAbstract: Governance and Financial Performance of State-Owned Enterprises (SOEs) Go Public Period 2014-2018. This study aims to provide empirical evidence regarding the effect of corporate governance on the financial performance of State-Owned Enterprises (SOEs) listed on the Indonesia Stock Exchange (IDX) during the 2014-2018 period. Research samples that met the criteria totaled 12 State-Owned Enterprises (BUMN). The analytical tool used is linear regression. The results of the study provide evidence of the urgency of the audit committee in corporate governance. This study also shows that board size, board independence, and government ownership do not have a role in explaining the variability in the financial performance of SOEs.Keywords: corporate governance, financial performance, state-owned enterprises (SOEs)

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