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Yoke of Corporate Governance and Firm Performance: A Study of Listed Firms in Pakistan

Author

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  • Ali, Amjad
  • Alim, Wajid
  • Ahmed, Jawad
  • Nisar, Sabahat

Abstract

The objective of this exploration is to show the relationships between corporate governance tools (board size, board independence, CEO status, Board Education, and Established Years of the firm) and firm performance which is determined by the return on asset (ROA). Quantitative data are used to discover the association between the variables. The top 75 companies registered on the Pakistan Stock Exchange involving the period from 2010 to 2019 are taken as a sample. The research found that there is a connection between the performance of the firm with the overall extent of directors, board independence, and average education of board representatives. Insignificant results came for CEO duality and established years of the firm. The result predicted that an increase in total board members and average education of board members will increase firm performance (ROA), whereas a reduction in board independence will reduce firm performance (ROA) which explains the importance of corporate governance for the success of firm performance. Unlike the previous studies, this study tried to find the long-term influence of corporate governance on firm performance by analyzing five different variables for the listed firms in Pakistan. The study provides the importance of corporate governance tools and their effectiveness for the success of organizations, especially in Pakistan.

Suggested Citation

  • Ali, Amjad & Alim, Wajid & Ahmed, Jawad & Nisar, Sabahat, 2022. "Yoke of Corporate Governance and Firm Performance: A Study of Listed Firms in Pakistan," MPRA Paper 113579, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:113579
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    2. Ashutosh Muduli & Sunita Verma & Archana Choudhary & Upasana Singh, 2024. "High-performance human resource practices in Indian banks: an examination from the institutional perspective," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 29(1), pages 186-198, March.
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    4. Audi, Marc & Sulehri, Fiaz Ahmad & Ali, Amjad & Al-Masri, Razan, 2022. "The role of terrorist events in determining stock returns in Pakistan: covering most vibrant era 2003-2013," MPRA Paper 115167, University Library of Munich, Germany, revised 26 Oct 2022.
    5. Zeeshan Mukhtar & Dr. Abdul Rasheed, 2023. "Ownership Structure’S Impact On Corporate Social Performance In Dissimilar Industry Groups: Evidence From Pakistan," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 12(2), pages 320-333.
    6. Abdul Raheem & Zahra Karim Sikapuria & Muhammad Waqas Nazir & Shahzadi Humbhi & Kashif Lodhi & Zuhaib Nishtar, 2023. "The Effect Of Employee Financing Diversity And Corporate Social Responsibility On Sustainable Firm Performance," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 12(2), pages 372-380.
    7. Quang Linh Huynh & Mohammad Enamul Hoque & Perengki Susanto & Waqas Ahmad Watto & Maryam Ashraf, 2022. "Does Financial Leverage Mediates Corporate Governance and Firm Performance?," Sustainability, MDPI, vol. 14(20), pages 1-20, October.

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    More about this item

    Keywords

    Board education; board independence; the board size; CEO duality; corporate governance; firm performance; Pakistan; return on asset;
    All these keywords.

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General

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